Skip to main content

View Diary: Anyone That May Receive Social Security Must Read This (192 comments)

Comment Preferences

  •  OK, I see this (8+ / 0-)

    I really didn't learn all that much in those MBA classes I guess.

    The implications of this make my brain hurt.  For example, there should be times then when the chained CPI is higher than unchained.  In your example, when the price of tuna comes down to only $50 per pound the next year, but salmon goes up 10%, only the increased cost of salmon should matter for the chained CPI.

    Unless your purchases change fundamentally over time, it shouldn't make a difference in the long term.  So then it all comes down to the validity of the chain assumptions, as Yglesias says.

    In the end, I think real-world experiences of SS recipients (see KelleyRN et. al. below) suggest that reducing the cost of living indexing is a bad idea.

    See you in Heaven if you make the list. R.E.M.

    by Akronborn on Sat Dec 08, 2012 at 09:36:36 PM PST

    [ Parent ]

    •  I agree that the anecdotes suggest (0+ / 0-)

      that CPI is already understating inflation, but would like to see better data. I certainly agree that those stories are troubling.

      The key point for me is that ostensibly, chained CPI should be looking at the choices of people with the same economic purchasing power over time. So the whole "catfood" criticism isn't realistic to me (unless catfood becomes an ironic-chic fashionable dietary choice or something).

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site