Posted on 04/12/2024 8:23:52 AM PDT by Red Badger
A recent research paper by four noted economists, including Larry Summers, the former Treasury Secretary under Barack Obama and former Harvard President, discovered that the real inflation rate during the Biden years, using pre-1983 calculations reached 18% in 2022.
The number is the highest inflation rate the country has seen in over 50 years.
This research project was published by these four authors at the nonpartisan National Bureau of Economic Research in late February and is just now making waves.
Marijn A. Bolhuis is an economist in the Macro Policy division of the International Monetary Fund’s Strategy, Policy, and Review (SPR) Department. Judd Cramer is a Harvard Economist.
Karl Oskar Schulz a Harvard undergrad whose analysis found that the higher cost of borrowing is linked to persistent consumer gloom.
Larry Summers is a former Harvard President and Barack Obama’s Secretary of the Treasury. Larry worked as the chief economist of the World Bank from 1991 to 1993.
The researchers also found that if the pre-1983 calculations for the Consumer Price Index (CPI) or inflation rate has not come back down under 7 percent since its peak in 2022.
The chart above shows thee Official and Estimated Consumer Price Index (CPI) since 1972. The estimated CPI reached 18% under Joe Biden, the highest number in over 50 years. via Forbes This study explains why American consumers are feeling squeezed under Joe Biden – inflation is eating up all their money.
Larry Summers tweeted out the study in February.
Forbes reported:
Numerous commentators—especially those defending President Biden’s economic record—have puzzled over why Americans are sour about the state of the U.S. economy. Unemployment rates have returned to pre-pandemic lows, commentators correctly point out, and the official rate of inflation is declining. So why are Americans ignoring the view of many experts that the economy is doing well?
According to a striking new paper by a group of economists from Harvard and the International Monetary Fund, headlined by former Treasury Secretary Larry Summers, the answer is that Americans have figured out something that the experts have ignored: that rising interest rates are as much a part of inflation as the rising price of ordinary goods. “Concerns over borrowing costs, which have historically tracked the cost of money, are at their highest levels” since the early 1980s, they write. “Alternative measures of inflation that include borrowing costs” account for most of the gap between the experts’ rosy pictures and Americans’ skeptical assessment…
Joe Biden’s Record Inflation
What would inflation look like under the pre-1983 formula?
Bolhuis et al. then went on to see if they could recalculate the official CPI numbers using a pre-1983-like formula that incorporated the cost of mortgage interest, auto loan interest, and credit card interest on the cost of living. They found three things: first, that the pre-1983-like formula led to a dramatically different estimate of inflation in 2022 and 2023, peaking at 18 percent in November 2022.
Second, they found that consumer sentiment—as measured by the widely-used University of Michigan Index of Consumer Sentiment—correlated much more strongly with the pre-1983 CPI formula than it did with the modern one that excludes interest costs.
Third, they found these differences to be also true in Europe: higher interest rates were correlated with lower consumer sentiment, and vice versa.
Everyone knows it’s true.
Even Democrats know it’s true. They were just hiding how bad it really is.
REAL inflation to people when they go to the grocery stores and to the gas pump and when they pay their car insurance, is closer to 30% overall.
So, government figures do not see what people see out there every day.
How dare they point out that food, energy and housing isn’t included anymore in inflation figures, like anybody really needs housing, food and energy in the first place to live...
"The number is the highest inflation rate the country has seen in over 50 years" |  |
Top economists is an oxymoron.
I’m glad Jimmy Carter lived to see that he and Millard Fillmore were not the worst Presidents.
Exposing the WH clown show.
As if Obama is surprised. His dolts and minions have engineered this disaster.... but, yet the clowns turn to Obama as if he is the “go to guy” for all things America.
Government BUREAUCRATS do not see what people see out there every day.
They get annual pay raises, COLAS, many paid holidays and very generous sick leave and personal time off.
They live and work in a bubble called the Beltway.
Everything is wunnerful inside there. People are great! Life is spectacular! Money flows like water......................
Now why would they do that?
When looking at the chart, you see the divergence between truth and government lies peaked one year to the month before the election. What a coincidence!
The article doesn’t mention Obama other than “Top Economists Including Barack Obama’s Treasury Secretary.”
Nor does it say “surprised.” It just explains their findings.
Duh...!
What, did someone decide to go grocery shopping finally and see?
Exactly, anyone who claims that the “economy” is great, whiz bang and Sunny obviously does not do the grocery shopping.
I joined the Army in 1978 because under Carter there WERE NO JOBS, Inflation was even worse then than today, and if you could GET gasoline, you had to wait in long lines.
My folks had a mortgage and no $ for me to go to college, so I enlisted. I graduated early from HS. I was NOT going to work a ‘Mall Job’ for the rest of my life. I was 17 years old. Had my 18th B-day in Basic Training. The Army gave me a JOB and and INCOME and an EDUCATION. ;)
Best decision I ever made. A Carter is STILL the worst president of my lifetime - until all the TRUTH comes out on Brandon and his Socialist Democrat Cartel.
At least the country was not half illegals in those days! Jimmah did not hate America!
Larry Summers is truth telling again... that’s a big no-no for democrats...
Larry Summers was one of the first high profile economists to first to warn of the coming inflation with the huge stimulus programs.
You make some good choices... helps explain why you’re insightful.
What starts out as voluntary comes to be mandatory.
“Everything which is not forbidden is allowed”
“Everything which is not allowed is forbidden.”
“Everything which is allowed is mandatory.”
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