Shadow Government Statistics

If you remember from prior posts, there have been changes made over time to both the calculations the government uses to measure inflation, and those it employs to measure unemployment.

On second thought, you don't have to remember.  Here's the link to our post and here's the chart that was included in that post.

All of these changes have been specifically designed to lower the numbers for inflation and unemployment in a deliberate effort to deceive the public with regards to the true economic condition of the country.

And because the government's numbers are designed to deceive, they naturally fly in the face of the everyday citizen's everyday experience.

The result of course being that while people don't for the most part understand the specifics of what is going on, they do know that the numbers the government touts in an effort to sell a program or justify it's existance are under the best of circumstances wrong or worse (and IMHO) a bald faced lie.

The further result of course being that people view their government as, under the best of circumstances an incompetant joke, or (and IMHO) a lying incompetant joke.

Even your garden variety public school dropout who probably couldn't even begin to tell you how a percentage is calculated, intuitively understands that if CPI is the measure of how much the price of stuff is going up, then two is way too low a number.

The final further result of course being that people come to understand that if they can't trust the numbers the government pushes out there every single day as fact, they can't trust anything the government has to say on any issue.

And when I say anything, I mean everything, from 9/11 commisions to anything you might care to ponder.

Which is exactly the situation we find ourselves in at this very instant.

So .........

If you want to actually fix this mess, the place to start is to go back to the original method for measuring unemployment and the CPI.

While those calculations may not be perfect, they will serve us well by accurately defining where we are in comparison to where we have been, and in doing so will represent the first tentative steps toward establishing an honest federal government.

OK, OK a more honest federal government.

The official, published chart for the Consumer's Price Index located on page 5 of the Bureau of Labor Statistics' "Detailed Report for January 2011" looks as follows.

"Core Inflation" as they like to call it is running at about 1.5%.

  That's not so terrible.

I personally would like to see it at 0% or even negative, but what the hell do I know?

Except, as many of us know, "Core CPI" doesn't include food and fuel.

Hmmm ..... I'm thinking government economists must not eat or drive.

The other day at the facebook page for this site, someone plugged John Williams' outstanding site, Shadow Government Statistics.

Despite the fact that we've known about this site for a long time, we've never really explored it thoroughly, mostly because so many of the people that we read, are reading it for us.

Once again, big mistake.

Anyway, to begin with the primers are free, mostly 12-15 paragraphs, easy to read and enormously worthwhile.

The following short excepts from Mr. Williams' primer on the Consumer Price Index offer some insight into the hows and whys of those items and calculations that do go into the CPI, and in so doing go a long way toward explaining how it is that government economists neither eat nor drive.

Inflation, as reported by the Consumer Price Index (CPI) is understated by roughly 7% per year. This is due to recent redefinitions of the series as well as to flawed methodologies, particularly adjustments to price measures for quality changes.

The CPI was designed to help businesses, individuals and the government adjust their financial planning and considerations for the impact of inflation. The CPI worked reasonably well for those purposes into the early-1980s.

In recent decades, however, the reporting system increasingly succumbed to pressures from miscreant politicians, who were and are intent upon stealing income from social security recipients, without ever taking the issue of reduced entitlement payments before the public or Congress for approval.

In particular, changes made in CPI methodology during the Clinton Administration understated inflation significantly, and, through a cumulative effect with earlier changes that began in the late-Carter and early Reagan Administrations have reduced current social security payments by roughly half from where they would have been otherwise.

That means Social Security checks today would be about double had the various changes not been made.

As always, click on the above chart to link up to the entire piece.

Way, super double, highly recommended.