[ancient_geezer]

 

The problem with using CPI (presumably CPI-U? There are several different values of "CPI" that are produced by the bureau of labor statistics)

CPI-U is specified as the standard measure.

The CPI itself is subject to manipulation, such as substitution of the price of generic drugs for name-brand prescriptions, something the BLS did in January of 1995 along with other changes to the CPI calculation.

Hmmm!, an automatic downward adjustment, to the FCA and costs of government. The political tendency is to understate inflation, just the opposite of what you have been claiming must happen.

No administration wants a glaring admission of inflation raising interest rates, inhibiting stock & bond markets, and depressing economic numbers, for folks to get stirred up about.

Understate the inflation rate too far and you get economic numbers that look like recessions or deflation with the Feds pounding interest rates into the ground, getting constituents sore because their hard earned dollars don't buy as many diapers and milk as it used to for not having kept up with the true value of inflation, getting banks and venture capital folks angry for loosing value on loans to the real inflation in the economy. Guess who gets blamed?

Either condition tends to loose elections for encumbants. Once again your $150,000 wild bureaucrat's arbitrary adjustment show's itself for the vaporware it is.

[Technogeeb]

Hmmm!, an automatic downward adjustment, to the FCA and costs of government. The political tendency is to understate inflation

True, but that's because the political benefit is currently for understating it. When there is a significant advantage for doing otherwise, it isn't difficult to imagine the bureaucracy manipulating the numbers in the other direction instead.

Understate the inflation rate too far and you get economic numbers that look like recessions or deflation with the Feds pounding interest rates into the ground

You mean like what is happening in the economy right now (not that this is relevant to the current discussion; I was just curious as to your opinion)?

Either condition tends to loose elections for encumbants. Once again your $150,000 wild bureaucrat's arbitrary adjustment show's itself for the vaporware it is.

Nevertheless, the system does allow such manipulation. It would only take an administration with "nothing to lose" (for example, the second, lame-duck term of a Gore administration, Deity forbid) who might consider the implementation of a national socialist system to be preferable to the damage to the economy (especially since the net result of a clear bias in the numbers would be for the "real" market economy to simply ignore them, making their applicability only relevant to the legislation, such as the "prebate" government handout, which are based on those numbers by law).