[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).

[ancient_geezer]

You mean like what is happening in the economy right now.

The CPI number is understated as a holdover from changes to the measure introduced by the Clinton administration. The impact of actual inflation at the individual's necessity level is being felt by folks on fixed income even more than those on nominally CPI adjusted incomes. I guarantee I see it in the grocery stores, fuel, and medical expenses which are the bane of retirees.

So yes we are seeing a marginally recessed economy made worse by overly conservative inflation measures. Though that may not be a bad thing in the long term as the effect tends to be counter inflationary by causing folks to tighten their consumer's belts resisting price changes. It plays hell on fixed to falling investment retirement incomes though. Things tend to look gloomy when the choice at the margins is between eating and meds.

Note the rate of increase in the National debt figure. That is a primary indicator of future inflation(just subtract the rates of population growth and productivity increase from it and you have a rough measure of near term potential for monetary inflation). The national debt is underwriting the money supply,for that is where banking dollars ultimately derive from in the fractional reserve system we opperate with.

Unfortunately not all thing inflate in the same way, fuel then necessity consumer goods usually lead the the inflation parade, with the financial and equity sectors trailing behind.

[ancient_geezer]

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.

Perhaps you will explain for us the political advantage of overstating the inflation rate. Lets see, high rising interest rates, falling liquidity and availability of loans. Most of the investment money starts churning hard assets instead of being applied towards long term capital expansion with a commensurate loss in business growth. We end up pushing the velocity of cash flow but lose commercial profitability.

Monkeying with the numbers outside of nominal error limits is disasterous with no political advantages to be found. Unless of course you are out to destroy a nation and foul your own nest right along with it.

[ancient_geezer]

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

Ah political suicide for the party of said lameduck office holder. Remember a grossly erroneous change can and would be stopped through injunction actions entered into the Courts by those who would be adversely effected. Financial Markets, Corporations, and the power folks all up and down the line will be out with blood in their eyes for the party at fault and minimal pennies and support to the candidates of the political party in their sight.

Numbers that are grossly in error, which is the only thing that could conceivable cause the effects that you envision, whould not stand long enough to be implemented. Everything number, every regulation, impacting enacted programs are put through a very strict process involving committe reviews, public input and review, 90 delay of implementation to allow congressional action(only takes one Congress Critter to bring implementation to a complete halt for challenge and Congressional tabling of the the proposal to kill it outright.) Even when implemented evidence material error, malfeasence or misfeasance brought through civil court action, would be sufficient for administrative relief of injuction until the controversy is resolved.

Your belief that substantive change of that magnitude is mere excessive imagination and paranoia on your part. The mechanics of process & political opposition simply does not allow for the exercise of the kind of individual arbitariness you imagine.

If the system were that fragile and lacked the capacity to prevent such changes from implementaton, we would already be in your full communist dictatorial h'll hole right now, and this discussion would not even be taking place.