Government Statistics And Lies

The Market Oracle ^ | 11-020-2009 | Dr Ron Paul

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Government Statistics And Lies

Politics / Market Manipulation
Nov 02, 2009 - 11:14 AM
By: Dr_Ron_Paul

There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year? According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased - by roughly 5%.

The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians' discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.

For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.

[snip]

[ThunderSleeps]

Government Statistics And Lies

Approximately 68% of statistics used to prove a point are made up...including this one. ;-)

Seriously, you can bend numbers to paint any picture you want.

[hellbender]

The real question should be not how “entitlements” are calculated, but why we have to put up with ever-increasing cost of living, year after year. Govt. and its enablers at the Fed create this inflation, which is especially devastating to people who saved all their lives for retirement.

[Blue Collar Christian]

Correct title should have read;

“Government statistics and other lies”

[FromLori]

Thanks for posting this excellent article. Something unrealized is the amount of unfunded liabilities already looming

Here, you get an overview of the looming bankruptcy of the Social Security/Medicare system. Politically, they are one program, which Congress is unwilling to challenge.

The unfunded liability of the two programs is now about $83 trillion. See Table 2. (Print this out to view Table 2 horizontally. To make it fit on a standard computer screen, it’s vertical here.)

http://www.garynorth.com/SmettersOnLiability2005.pdf

To pay for Social Security and Medicare, the government would have to raise income taxes by 81%.

For evidence of how Congress siphons off the trust fund money, refuses to count this massive borrowing as part of the official budget deficit, and then spends the money, see these sites:

M. W. Hodges’s “Grandfather Report”

http://mwhodges.home.att.net/soc_sec.htm

Empty Trust Fund

http://www.fff.org/comment/ed0901j.asp

Accounting Trick

http://www.socialsecurity.org/daily/09-27-00.html

From

http://garynorth.com/public/department30.cfm

http://www.lewrockwell.com/north/north778.html

[GretchenB]

Govt. and its enablers at the Fed create this inflation, which is especially devastating to people who saved all their lives for retirement.

Remember the good old days when you could live off the interest on your savings - forcing interests rates low so the 'underprivileged' could participate in the sub-prime crisis - and now with the $8000 new home buyer's tax credit to do it all over again

The biggest Ponzi scheme in history (SS) could survive if it payed only those that paid into it. Instead it covers spouses, adopted kids, ex-spouses, etc. I actually make $5 dollars more on my own SS account than I would if I had never paid a dime in and drew wife's benefits. Heck, you can even adopt your grandchildren and they would be covered. Let those who need it and don't qualify suck off the welfare roles - of course, that wouldn't be PC.

Maybe it would get the attention of the radical left if they knew that rich women who have never worked a day in their lives are drawing wife's benefits that are way higher than most of the 'underprivileged'.

To keep it PC they will put a means test on it rather than fixing the problem and making it 'fair'.

[justrepublican]

The basket must not contain taxable items.

[GretchenB]

Are you saying that Clinton didn’t leave office with a surplus? I’m shocked...

[JasonC]

Looney tunes always allege vast conspiracies at the moment when their past predictions go pear-shaped...