Wowza, talk about the ivory tower.
Ben Bernanke, quoted in a Reuters story as seem on Yahoo News today:
"Bernanke also told his audience the Fed agrees with studies that say government data overstates inflation data. 'I still think that there's still some overstatement, and Federal Reserve estimates are, depending on the indicator, somewhere between half a percent and a percentage point of overstatement of the inflation rate,' he said in response to questions."
I suspect that the overwhelming majority of people OUTSIDE of Washington DC and university faculties would say that government data UNDERSTATES inflation substantially. I agree with that. I think the government data uses so-called "quality" adjustments to cause large understatements.
I suppose IF I was paranoid or believed in conspiracies I would think that the government does this to rob people of the benefits of their Social Security and to under-index tax bracket intentionally so the government can collect more tax money from its inflation. Hmmmm.
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3 comments:
I'm not sure if I agree with you on the motives of the bureacrats that calculate governmant statistics. But I do agree that we need to overhaul the process so as to reflect more accurately what is going on in our economy. President Bush always talks about how "great" our economy is . Meanwhile working families and the middle class have been getting raped and pillaged by his administration. He must be talking about his friends and contributors whom he has showered with tax breaks and subsidies. Disgraceful and outrageous!
I think the bureaucrats follow the signals of the powerful. For example, when some environmental regulation drives up prices of something, they are "encouraged" to adjust the price for the "benefit" of the regulation. I remember this hapening numerous times, including car safety and electricity prices.
From what I see, the looting is bi-partisan. No one on either side proposes real tax fairness by making the wealthy municipal bond freeloaders pay their fair share even for Medicare for the elderly. Also see my prior post about tax unfairness to the elderly. It's endless. All the D's do is push ideas to increase government power while the R's blather about "free" markets. Both sides principally push ideas to pay off their supporters & supporting lobby groups. DC is a gigantic hog trough for both sides.
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