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May 24, 2006

The disconnect in inflation statistics

"In the early 90’s the government realized it had a problem with rising entitlement costs for Social Security, Medicare, and government pensions. These entitlement payments were indexed by the inflation rate each year. With inflation on the rise it meant these costs were rising faster, thus making government deficits much worse. In order to bring the government deficits under control, it would be necessary to bring rising entitlement costs down. ...The solution was to change the way inflation is measured." More

Trusting government to keep statistics on its management of the economy is like trusting a fox to count chickens in the henhouse.

Posted by Ray Hewitt at May 24, 2006 09:29 PM