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View Diary: This Deal Would Stink (12 comments)

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  •  I'm all for chained CPI (3+ / 0-)
    Recommended by:
    FG, jj32, misslegalbeagle

    If and only if they make the Social Security CPI based on an actual market basket of things seniors buy.

    In other words, I think chained CPI is more accurate in general, but the current measure of CPI they use understates what seniors experience as inflation.  

    Numbers are like people . . . Torture them enough and they'll tell you anything.

    by Actuary4Change on Mon Dec 17, 2012 at 02:33:33 PM PST

    •  Chained CPI is not more accurate in general (1+ / 0-)
      Recommended by:
      George3

      Chained CPI works as follows.

      Let's say a family bought 5 pounds of meat a month, but the price of that line item suddenly increased 20%, Y/Y.  And let's say that meat was part of the CPI.

      With a chained CPI, you would be able to substitute tuna (assuming that the price of tuna was flat) for meat, thereby reflecting a much lower inflation.

      The Chained-CPI assumes that the same family that consumed 5 pounds of meat a month would switch to tuna, b/c of the price differential.

      Ironically, the Chained-CPI is the brainchild of the Econ professor whose recommendation  helped get my first job on Wall Street, at Lehman Brothers.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Mon Dec 17, 2012 at 02:56:40 PM PST

      [ Parent ]

      •  That also applies to medicine even though (2+ / 0-)
        Recommended by:
        PatriciaVa, George3

        doing so would be against doctor's orders.  As an example, if a diabetic cuts back to taking half insulin or cutting their pills in half (without telling their doctor) to make them last longer then the chained CPI will reflect that.  That's right, there is no requirement that the food basket meet the minimum FDA daily requirements or that the "basket" of medicine follows the doctor's orders with regards to dosage.

        You have watched Faux News, now lose 2d10 SAN.

        by Throw The Bums Out on Mon Dec 17, 2012 at 06:45:19 PM PST

        [ Parent ]

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