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I'm sure there are some folks here who understand all the differences between Cost of Living Adjustments, CPI, and chained cpi.  I didn't, and probably still don't, but I've spent several hours reading about all of it on wiki and various other places and here's my simpleton's analysis...below the orange gizmo:

Let's say you go into the grocery store on January 5th, 2012, and buy a big basket of all the things you think you need, within your budget, to eat for a month.  Let's say there's A amount of hamburger, B amount of bread, C amount of cheese, D amount of milk, E amount of fruits and vegetables...and so on.  At the checkout, your basket comes to $300.

Next year on the 5th of January, 2013, you do the same thing purchasing exactly the same things in the same amounts and the bill is $309.00.  Essentially, your cost of living has gone up 3%.  Now, let's assume that on that 2nd trip you note that hamburger has gone from $2.99 a pound to 5.99 a pound and the peaches you bought before went from $0.99/lb to $1.99/lb.   So you substitute an equivalent number of pounds of pink slime and bananas  for what you used to buy.  Your bill is now still $300.  Your cost of living didn't go up at all.  You aren't eating the same, or happy about it, but  suddenly the new basket, with substitutions becomes the new standard.  The "fixed contents" comparison is the real index of how prices have gone up, but leave it to the government to come up with a way to now change the basket and tell you there will be no cost of living adjustment.  The new basket, and next years new basket with even more pink slime, no milk, no bread, etc., becomes the new standard...and this is the way the CHAINED cpi works.  To carry it to the extreme...some years from now when your basket contains only beans and powdered milk, a small bag of salt, etc, for the same $300 the chained cpi will tell us things are still just dandy....no inflation here...you just "substituted" stuff...and you're perfectly fine...right?

This is the chained cpi...and the "basket" contains more than food...it's all kinds of "things" (taxes, insurance, rental equivalency of home ownership...)and essential services like medical care, phone service....etc.)   The BLS (Bureau of Labor and Statistics) says these substitutions are necessary because, for example, if we used the cost of a long distance call ten years ago versus the cheaper cost today, we'd be over-estimating inflation.  I can buy that...technology advances can actually make lots of things less expensive.  OTOH, when you substitute a bag of beans for a pound of hamburger because you can no longer afford the hamburger, the "substitution" isn't really a change of choice in the market.  And, if your Social Security COLA is based on cost of the new basket of crap versus the old basket of edible, usable, satisfying things...you're getting screwed...by the numbers.

I'm sure someone else can do a better job of explaining this.  And, I know there are plenty of people among us already eating beans versus hamburger.  I'm just trying to make a simple, if not totally technically correct, example.  I hope it helps someone get the picture.

The chained cpi is a screwing.  Obama has to know this.  It's not chess, it's not compromise, it's a flat out stake in the heart of Social Security.  And, who's to say that the calculation won't change later.  I can see it now...the new basket of frozen bat shit and reconstituted urine maybe goes down in cost...and they'll want money back.    

Originally posted to Persiflage on Wed Apr 10, 2013 at 06:23 PM PDT.

Also republished by Social Security Defenders and Community Spotlight.

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Comment Preferences

    •  And, of course, it's not just social security (30+ / 0-)

      affected by this statistical shafting, it's veterans and others.
      Some measures of CPI don't include food and energy costs because the BLS says they're "too volatile."  Wow, we sure wouldn't want to reflect reality would we?  That might mean an extra $15/month to some pensioner somewhere.

      Meanwhile, no word on getting rid of lucrative Congressional pensions and cadillac health insurance...or reducing their pay to the level of "part time" workers.

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Wed Apr 10, 2013 at 06:37:40 PM PDT

      [ Parent ]

      •  This guy will get right to it, cause he's against (8+ / 0-)

        cutting benefits, cause he's met too many struggling seniors........

        I believe that cutting benefits is not the right answer.

        I meet too many seniors across the country who are struggling with the limited social security benefits that they have.

        --

        "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

        by allenjo on Wed Apr 10, 2013 at 08:42:49 PM PDT

        [ Parent ]

      •  Cutting an extra $15 a month from someone's (12+ / 0-)

        pension so more money can be crammed into those offshore tax shelter accounts that are already crammed with trillions of dollars.

        It's insane.

      •  It's also a tax increase. It's used to calculate (6+ / 0-)

        the tax brackets, standard deductions and exemption rates.  If your income rises faster than a depressed dpi, it will throw you into a higher bracket.  It affects those making under $100K more so it's regressive. No wonder Republicans like it.

        It will also affect income thresholds for assistance programs and student aid.  

      •  Also, Income Tax Filers Will Enter Higher Tax (1+ / 0-)
        Recommended by:
        SingleVoter

        brackets sooner since CPI measures inflation differently than the current method. It's a back door tax increase without actually having to raise tax rates so that's why repugs and Dems both want it. Repugs know their brand requires them to never vote for a tax rate increase but they also want more revenue (despite their public claims to the contrary).

        "The problem with posting quotes off the Internet is you never know if they're genuine."--Gen. George Washington at the Battle of Gettysburg, February 30, 1908

        by Aspe4 on Thu Apr 11, 2013 at 08:11:50 AM PDT

        [ Parent ]

      •  CPI is Keynes as opposed to Friedman (0+ / 0-)

        Its activist rather than conservative and apparently widely misunderstood by people who aren't presently trying to live on Social Security.

        Currently, the United States’ federal government uses inflation measurements to calculate various programs outlays, such as Cost of Living Adjustments (COLAs) for programs like Social Security, and provisions related to the tax code. Right now, most programs are indexed to the CPI-U (Consumer Price Index for All Urban Consumers) and the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers).[8]
        Most programs includes most tax thresholds which are increased right along with Social Security and Medicare benefits. In other words Obama is doing something that makes Grover Nordquist apoplectic.
        In 1996, the Advisory Committee to Study the Consumer Price Index (The Boskin Commission) overstated inflation and estimated that in 1996, it was over-estimated by 1.1 percent. BLS responded by making changes to the CPI-U and CPI-W. However, a portion of the bias (upper-level substitution bias) was not addressed. In 2002 BLS created a new index, the Chained CPI that addressed this concern.[9]
        The first adjustments we have already been living with since 1996, but there remains a bias known as the substitution bias
        The bias corrected is known as the substitution bias. The idea behind this is how consumers respond to price increases- for example, if the price of Granny Smith apples goes up, consumers may decide to purchase more Red Delicious Apples; this "lower-level" substitution bias is accounted for in the current CPI measurements. However, if consumers respond to the price increase of Granny Smith apples by purchasing fewer apples and instead purchase more oranges, thereby changing the “basket of goods”, this "upper-level" substitution is not accounted for in the traditional CPI, but is in the Chained CPI. This is because the CPI-W and CPI-U use a fixed basket of goods. Because of this, the Congressional Budget Office notes that current COLA’s “CPI grows faster than the cost of living does.”[3][10]
        The Keynsian economic theory behind substitution bias holds that people consume from each according to their abilities, if you are unable to consume you substitute to each according to their needs. For those of you who recognize what is going on here, it changes the distribution of wealth even more than the increase to the benefits poor people get on SSI by raising the minimum wage or the cap
        According to the Committee for a Responsible Federal Budget, “moving to the Chained CPI would address this by using a superlative [chained] index that updates expenditure weights and formulas in order to address consumer response to substitution between categories.”[3]

        Since 2000, on average, the Chained CPI has measured inflation between 0.25 percent to 0.3 percent lower than CPI-U and CPI-W. Opponents of the change note that while the difference is small, it compounds over time, making the reduction in outlays for COLAs for Social Security larger when looked at over a long time horizon.[3]

        Live Free or Die --- Investigate, Incarcerate

        by rktect on Fri Apr 12, 2013 at 05:29:30 AM PDT

        [ Parent ]

        •  Thanks for adding to the understanding, but... (1+ / 0-)
          Recommended by:
          rktect

          many of the actual "basket" items comprising the CPI don't have rational substitutes:

          --Can't afford heating oil?  Don't burn it.  Walk around wrapped in torn blankets.  I did.
          --Can't afford medical care?  Don't use it.  I don't.
          --Can't afford gasoline?  Walk 45 miles (much of it using the far-right lane of the Capital Beltway) to bankruptcy court.  Don't think that's legal.
          --Can't afford groceries?  Stop buying fruit and vegetables and meat.  Done that.
          --Can't afford to buy books?  Use the library, but since you can't afford transportation, stop reading.  Or re-read the books you already have.

          The easy items -- entertainment, eating out, cable, cell phone, newspaper, clothing, gifts to grandchildren, charities  -- were shrugged off years ago.

          At some point this death-spiral of "substitution" grinds to a halt, as far too many of our fellow citizens already know.

          One of our members argued that chained CPI wasn't really a cut; that was laughable and economically wrong.  Many of us claim that it's too small a cut to worry with; for many, that may be true.  For some, tragically, it's death from the thousandth cut.

          A few assert that proposing chained CPI has extraordinarily powerful negative symbolic effect; if none of the other arguments succeed, that one resonates -- with me, at least.

          Why is it admirable for zealots to cling to their beliefs but pragmatic and realistic for the rest of us to cede ours?

          (-7.62,-7.33) Carbon footprint 12.6 metric tons. l'Enfer, c'est les autres.

          by argomd on Fri Apr 12, 2013 at 07:59:25 AM PDT

          [ Parent ]

          •  I'm on Social Security (1+ / 0-)
            Recommended by:
            argomd

            Medicare, Medicaid (Maine Care), SNAP, HEAP, LI Heap; get VA healthcare, gas cards to get the wife to her radiation treatments.

            I don't buy much, I cut split and burn wood for heat, get some help as noted above, hibernate for the winter wrapped in quilts made from the scraps left over from making garments and bags and bowls and such.

            I get my medical care from the VA with some help as noted above.

            I take a load of wood over to a neighbor who puts some gas in the tank and I get some help as noted above but basically don't drive much.

            I forage food, get some from places that give it away for free, get some manure from the neighbor I gave the wood so I can grow some, maintain an orchard of wild apple trees and berry bushes, and get some help as noted above.

            To deal with legal stuff I filed for indigence at the court and file my motions pro se.

            My library spreads out over every room in the house, the barn and every outbuilding but now I mostly  use google books and manage to find what I need to know either on the web or in the waiting room.

            We don't eat out go to movies (they are free on hulu for the cost of looking at the ads) got rid of the cell phones, cut cable to the minimum, don't have a newspaper, don't buy clothes, don't give gifts except what we make ourselves, (I make cigar box guitars).

            Basically we are poor, elderly and ill but with no worries except for how to get rid of the Republican obstructionists so we can deal with climate change.

            Live Free or Die --- Investigate, Incarcerate

            by rktect on Fri Apr 12, 2013 at 09:44:05 AM PDT

            [ Parent ]

            •  Sounds familiar, friend. (0+ / 0-)

              There are a few workarounds, and you sound remarkably able to find and make good use of them.  I applaud you both for that!  

              One of the best parts of being alone is that no one I care about is suffering because of me.  

              And like you, at least I can still vote!

              (-7.62,-7.33) Carbon footprint 12.6 metric tons. l'Enfer, c'est les autres.

              by argomd on Fri Apr 12, 2013 at 12:38:48 PM PDT

              [ Parent ]

    •  Really good explaining substitution (16+ / 0-)

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Apr 10, 2013 at 06:38:05 PM PDT

      [ Parent ]

    •  Thank you. (13+ / 0-)

      n/t.

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Wed Apr 10, 2013 at 06:39:42 PM PDT

      [ Parent ]

  •  Outstanding. And no, someone else could not do (21+ / 0-)

    the justice you did in explaining this. Thank you!

    And for anyone who doubts the diarists hypothesis just look at a gallon of milk or a dozen eggs today compared to a couple of months ago. Milk in my neighborhood is $4.00. Eggs are $2.00. Gasoline is $3.50 gal.  It used to be you could buy a gallon of milk for less than a gallon of gasoline.

    •  Yet farmers still can't make a profit. (3+ / 0-)
      Recommended by:
      elwior, Sunspots, JesseCW

      Dairy farmers survive ‘milk cliff,’ but feed, fuel costs still troubling

      Prices per 100 pounds of milk have been good of late. Doak, who milks 45 cows, most recently was paid $25 per “hundred weight” by Oakhurst, he said Friday.

      “The price isn’t the problem right now,” Doak said. “It’s the input,” or cost to produce the milk.
      [...]
      Julie-Marie Bickford, executive director of the Maine Dairy Industry, said that according to a recent report by the University of Maine Cooperative Extension, small farms like Doak’s see an average of $30 in costs to produce 100 pounds of milk.
      [...]
      If the farm bill hadn’t been extended, prices would have reverted to a 1949 “parity” structure, through which milk prices are set by the price of cheese and other commodities at the Chicago Mercantile Market. The hundred-weight price might have been at $39 for farmers. That might have meant store prices of $7-$8 per gallon.

      Analysis provided by Sen. Susan Collins’ office noted that while farmers would initially be rolling in the dough at nearly $40 per hundred pounds of milk, consumer demand would quickly drop, leaving those farmers without a market.

      -7.75 -4.67

      "Freedom's just another word for nothing left to lose."

      There are no Christians in foxholes.

      by Odysseus on Wed Apr 10, 2013 at 11:07:03 PM PDT

      [ Parent ]

      •  Nonsense (0+ / 0-)

        Farmers do not deserve a profit.  Yes, they deserve every opportunity to make a profit while they are making good food that nourishes our bodies.  But they don't deserve a guaranteed profit while they produce more milk than Americans want to drink.

        There are too many dairy cows, too many dairy farms, and too many dairy farmers.  If someone wants to say that we have too many factory dairies and too few dairies producing especially high quality milk, OK.  But the point is that if there wasn't too much milk on the market the price would be higher, and the remaining dairymen would make money.

        •  People don't have the disposable income to buy (1+ / 0-)
          Recommended by:
          Aspe4

          milk.  The demand is down because 22% of our children are living in poverty as calculated by the Federal Government (a massive underestimate).

          dEar Ellois: U send Fud down holez, we no eaTz u. That iz deAl. No forget. MooRlockz Haz 2 eats. Stoopid Elloiz.

          by JesseCW on Thu Apr 11, 2013 at 08:02:51 AM PDT

          [ Parent ]

  •  Fuel costs drive food costs 'cause we've (24+ / 0-)

    done away with local ag in favor of corporations, CAFOs, GMOs, and Too Big To Fail.

    Mr. President: Cut the subsidies to ConAgra, ExxonMobil, and Monsanto first.

    LBJ, Lady Bird, Van Cliburn, Ike, Ann Richards, Barbara Jordan, Molly Ivins, Sully Sullenburger, Drew Brees: Texas is NO Bush League!

    by BlackSheep1 on Wed Apr 10, 2013 at 06:36:34 PM PDT

  •  Chained CPI cuts the EITC, Food stamps, WIC (25+ / 0-)

    Low income energy assistance, Medicare subsidized prescription drug coverage.

    National School Lunch program.

    And an income tax increase of 65 billion over 10 yrs due to tax brackets being adjusted by C-CPI.

    The chained cpi is a screwing.  
    Dont hold back, tell us how you really feel LOL.

    Real good effort @ explaining the substitution theory. TnR

    ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed Apr 10, 2013 at 06:36:49 PM PDT

  •  And If You Go On Disability At Age 30 (20+ / 0-)

    by the time you're 70 you'll be paying the President's salary personally.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Wed Apr 10, 2013 at 06:46:17 PM PDT

  •  CPI (15+ / 0-)

    already accounts, to an extent, for substitution:  If the average consumer buys less beef, the weight given to beef in calculating CPI goes down.  Ditto for obsolete technologies that people aren't using.

    The "best" part of C-CPI is that its proponents tend to be market fundamentalist neoliberals, yet their argument assumes that cheaper products are just as good as more expensive ones and thus rejects the Market Theory of Value that is a necessary premise for all capitalist economic theory, and especially neoliberal ones.

    "with rights come responsibilities." Wrong. Responsibilities continue to exist even if you abdicate your rights.

    by happymisanthropy on Wed Apr 10, 2013 at 06:58:34 PM PDT

  •  I think it can be said that there is unhappiness (13+ / 0-)

    with this chained CPI thing.

    What's freaky is that the White House is so willing to appear out of touch.

  •  Outstanding explanation. (12+ / 0-)

    We participated in the annual CPI survey all last year and they did not ask us what items of food we bought. They just wanted to know the total spent on food. We didn't get asked even once about substitutions. We did have to explain the seemingly inordinate amount of transportation and transit expenses we incur in a month given that there is no way to get off this peninsula without paying.

    Organ donors save lives! A donor's kidney gave me my life back on 02/18/11; he lives on in me. Please talk with your family about your wish to donate.

    Why are war casualty counts "American troops" and "others" but never "human beings"?

    by Kitsap River on Wed Apr 10, 2013 at 08:16:09 PM PDT

  •  I'm not so sure (4+ / 0-)

    "...someone else can do a better job of explaining this."

    More pink slime and urine flavored cough drops isn't what I was looking forward to, in retirement.

    "Doing My Part to Piss Off the Religious Right" - A sign held by a 10-year old boy on 9-24-05

    by Timbuk3 on Wed Apr 10, 2013 at 08:20:53 PM PDT

    •  So let's take a look at what's unfair (7+ / 0-)

      about using chained CPI.

      Here's one thing: chained CPI intimates that grandma and grandpa have been getting away with something. Your boss isn't giving you a pay increase, so why should the old folks get one? Proponents of chained CPI and other cuts in social safety-net spending on the elderly routinely pit them against the young 'uns, pointing out that so much money is not being spent on things like education because the oldsters won't take a financial hit.

      After all, it was 81-year-old senator Alan Simpson – he of the Simpson Bowles deficit cutting commission – who once described Social Security as "a milk cow with 310m tits."

      But of course, we know that corporate welfare is what is really sucking on that milk cow with 310m tits.

      -

      If you calculate that rate of decrease over a couple of decades, you're talking serious money. If someone collects benefits over 30 years, using chained CPI would cut their benefits by nine percent, according to the Center for Economic and Policy Research.

      "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

      by allenjo on Wed Apr 10, 2013 at 09:29:17 PM PDT

      [ Parent ]

  •  There is enough in the proposed budget (1+ / 0-)
    Recommended by:
    elwior

    That if the budget as proposed today was voted  on. I would be glad to vote for and support it.

    I would also vote for the senate's "version"

    The same is NOT true for the house version.

    I have no idea about about the strategy of coming out with a bill with proposed compromises.  

    But once again as proposed by the president...the positives far outweigh the negatives of the total bill.

    http://money.cnn.com/...

    my favorite

    "Enact a Buffett Rule: Last year, Obama proposed the "Buffett Rule" as a guiding principle for tax reform.
    The idea: to make sure that people earning more than $1 million paid their "fair share" of federal tax -- which he defined as a minimum of 30%.
    This year, he includes a more concrete version similar to one proposed in a bill last year by Sen. Sheldon Whitehouse, according to a senior official.
    That Senate legislation would impose a minimum 30% effective federal tax rate on those with adjusted gross incomes above $1 million, although it phases in for those making between $1 million and $2 million."
    There was also a nice infographic that cnn had up earlier in the day. Showing the nice increases in funding for important things like education etc.

    If somone could re-find that grphic and link to it. I'd thank you.

    If you want to spend more money on some things...you will have to find the money somewhere else.

    The net trade offs of Obama's proposal are very much worth it.

    •  So, you have no problem with cutting SS? (8+ / 0-)

      Furthermore you want to give credit to the Prez for wanting to fund private pre-schools. And to top it off you infer that we are asking for a unicorn in spending. Words fail me.

      •  No problem if he replaces it with something better (0+ / 0-)

        and that he has.

        http://www.theatlanticwire.com/...

        for example

        "Speaking Friday in Miami, President Obama called for $21 billion in new national infrastructure investment."

        Take 21 billion from SS and put it into infrastructure fine by me.

        Also

        "
        Cap value of itemized deductions: As he has proposed before, the president wants to limit the value of itemized deductions and exclusions for high-income households.

        The proposal is estimated to raise $529 billion over 10 years.
        "

        vs

        " The Social Security cuts would come from a slightly stingier inflation adjustment known as "chained CPI" that would reduce annual cost-of-living increases for a variety of programs by about 0.3 percentage points a year. It would reduce federal spending on government programs over 10 years by $130 billion and promises to save far more in subsequent decades."

        http://www.huffingtonpost.com/...

        I will gladly take the 500 billion tax increase on millionaires for a 100 billion cut in SS.

        Its good not to want to cut SS, we do not want to make this too easy... but it is not some sacred cow. Id cut every last penny if the price was right

        Want to trade social security for full national health care?

        Id take that trade in a heartbeat.

        •  Waste of time. (2+ / 0-)
          Recommended by:
          JesseCW, burlydee
        •  You would glady accept...... (5+ / 0-)
          Recommended by:
          elwior, Sunspots, JesseCW, Dem Beans, burlydee
          I will gladly take the 500 billion tax increase on millionaires for a 100 billion cut in SS.
          How does that help the seniors, the poor, the disabled, widows and children and our 3.2 disabled veterans that depend on social security?

          "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

          by allenjo on Wed Apr 10, 2013 at 10:38:57 PM PDT

          [ Parent ]

          •  that 500 billion is not vanishing. (0+ / 0-)

            Its going somewhere.  Some is going to more funding for education.

            Some is going to investment in scientific research.

            Some is going to better invest in public infrastructure.

            Some is going to provide more funding for healthcare initiatives.

            Some is going to renewable energy / energy research

            Some is going to deficit reduction.

            http://www.bloomberg.com/...

            This shows you some numbers for the next year.

            I like all 5. I would not trade SS for #5 in particular. But that 400 billion difference makes a hell of a lot of difference  and makes the net trade worth it.

            There is more than one way get funding where the funding is needed. All of those I listed make the lives better for those you listed.

            •  None of the items goes to support the households (5+ / 0-)
              Recommended by:
              elwior, Sunspots, JesseCW, barbwires, burlydee

              to a roof over their heads, water, electricity, transportation, or any bills they pay for basic living.

              How does that help the seniors, the poor, the disabled, widows and children and our 3.2 disabled veterans that depend on social security?

              Are you aware of the poverty level in this country, and that it's now at the highest in decades?

              I am going to answer my own question. You obviously are not.

              You have one purpose in this diary and that is to praise the president.

              So why don't you just post "I Love My President Obama, he is the greatest, the bestest president EVAH!" and be done with it.

              Liberals care about the poor, the elderly, the disabled, those struggling in a society that is governed for the benefit of the richest in the country, not for the disadvantaged.

              "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

              by allenjo on Wed Apr 10, 2013 at 11:30:28 PM PDT

              [ Parent ]

              •  All of those go to support households (0+ / 0-)

                Your telling me that reduxced cost of transportation does not have a significant positive direct impact on the poor?

                Having a lack of understanding of how investments in infrastructure benefits society does not make your argument right.

            •  Worth it (6+ / 0-)

              Tell that to the 16% of seniors who already can't afford enough food to eat regularly. They'll be glad to know you're OK sacrificing another one of their meals per week, starting next year; with the number of lost meals increasing annually.

              That's awfully big of you!

              •  You do (0+ / 0-)

                realize that the budget proposes increases in funding for such things as health and human services.

                Which in total would slightly more than compensate for any proposed SS cuts?

                Did you consider any of these proposed increases in services to the exact groups you are o so fiercely crying for?

                O wait no. People are just so eager to just yell about social security than actually consider the net impact of any proposal.

            •  hey 011,Do you get paid to put this crap out here? (0+ / 0-)

              ...sounds to me like you have no skin in the game, just here to peddle weak tea and doubt.

              "Is that all there is?" Peggy Lee.

              by jm214 on Thu Apr 11, 2013 at 04:47:14 AM PDT

              [ Parent ]

        •  You can't eat roads. (3+ / 0-)
          Recommended by:
          Sunspots, JesseCW, Over the Edge

          "Whenever a fellow tells me he's bipartisan, I know he's going to vote against me."-- Harry S. Truman

          by irmaly on Thu Apr 11, 2013 at 07:21:27 AM PDT

          [ Parent ]

    •  Wrong (6+ / 0-)
      If you want to spend more money on some things...you will have to find the money somewhere else.
      There is a net cut in spending in the Obama plan.

      There is no debt problem, there is no deficit problem.

      We don't need to "find the money"

      We have enormous demand for our Treasury securities and have plenty of room to take on more debt to produce a net stimulus to get GDP going and faster job growth.

      As anyone who has inflation-indexed securities knows, THERE IS NO INFLATION!

      Our sovereign system is only inflation-constrained, not revenue-constrained. We don't need to cut in some areas in order to spend in others, we don't even need to tax in some areas to spend in others.

      The Buffett rule, 28% deduction cap, carried interest loophole removal, corporate welfare removal -- these things aren't for raising revenue per se, but to help fight inequality and give more room to spend a lot more on social programs.

      Deficits don't matter, jobs do.

      by aguadito on Wed Apr 10, 2013 at 10:02:59 PM PDT

      [ Parent ]

      •  No you are (snark) (0+ / 0-)

        "There is a net cut in spending in the Obama plan." Not in the things I care about.

        and BTW under the proposed budget the the share of the GDP of government grows.

        From a shade under 20% to a shade over.

        "
        The Buffett rule, 28% deduction cap, carried interest loophole removal, corporate welfare removal -- these things aren't for raising revenue per se, but to help fight inequality and give more room to spend a lot more on social programs."

        The income gained from limiting itemized deductions alone is five times that of the SS cuts. 500 billion vs 100 billion.

        Seriously you would not be happy with a MINIMUM five to 1 victory ratio?

        five to one is not good enough eh?

        •  To correct my own numbers (0+ / 0-)

          http://www.bloomberg.com/...

          "Under Obama’s budget plan, in 2023 the federal government would collect 20 percent of the gross domestic product as revenue, the first time it would hit that mark since 2000."

          "That’s compared with 16.9 percent this year and 19.1 percent projected for 2023 if Congress does nothing, according to the Congressional Budget Office. "

          Ya who knew adding 3% of the GDP in taxes mostly on the rich would be such a victory for the republican party and a loss for the democratic part.

        •  No (4+ / 0-)
          Recommended by:
          elwior, allenjo, Sunspots, JesseCW
          Seriously you would not be happy with a MINIMUM five to 1 victory ratio?

          five to one is not good enough eh?

          No.

          because once you cut SS with chained CPI, there's no going back.

          the budget does a lot to reduce inequality, and it's a pity none of it will happen, and I don't think it's worth sacrificing elderly & disabled to do this.

          I had a pause before (and JesseCW set me straight) wondering if there was sufficient protections for the most vulnerable that it may be worth exchanging for reducing inequality.

          But when the budget was released it became clear that Obama was using Romneyesque tactics to say "yea we'll protect the vulnerable, just trust us, it works out"

          SS benefits are already too low, they shouldn't be cut.

          The tax system is rigged for the rich, it should be at the very least UNRIGGED so oligarchs like Romney and Buffett don't pay 12% effective tax rates.

          And the corporate welfare should be disappearing without any compromise too.

          So no, i don't find it to be a "victory ratio". i see the system as dramatically screwed up and in need of being un-fucked, and not traded for cuts to the needy.

          Deficits don't matter, jobs do.

          by aguadito on Wed Apr 10, 2013 at 11:03:37 PM PDT

          [ Parent ]

        •  in addition (2+ / 0-)
          Recommended by:
          elwior, JesseCW

          you SHOULD care that on a macroeconomic level this budget presents a net CUT in spending.

          because as we can see in Europe, austerity does not work for jobs growth or relative debt reduction.

          unless you want us to repeat that crap in the US, then you should not be promoting net cuts on a macro level.

          Deficits don't matter, jobs do.

          by aguadito on Wed Apr 10, 2013 at 11:04:51 PM PDT

          [ Parent ]

          •  There are two different (0+ / 0-)

            items of concern, the economy as a whole(1) and the finances of the government (2).

            It would be a lovely thing if increased government spending to "grow" an economy paid for that increased government spending, but it doesn't.

            In areas in Britain where government spending is 70% of the economy, areas like Belfast and the Northeast UK don't roar back to economic vitality.

            The shipbuilding industry has moved to Asia.

      •  No inflation? (0+ / 0-)

        I guess you must live in a house that never needs repairs.

        A package of O-rings that might have cost $1 in the 1980's cost me $3.

    •  So let's just tax capital gains like ordinary (2+ / 0-)
      Recommended by:
      Sunspots, JesseCW

      sweat-earned income and use that money for all the goodies you like...instead of taking the money from the most vulnerable among us.

      Don't like that?  OK, let's eliminate taking interest deductions on yacht loans or  homes costing more than $1 Million.  Or, let's stop subsidizing oil companies and .... the list is long.

      When shared sacrifice really means "shared" I'll look objectively at any proposal.  Meanwhile... it's smoke and mirrors.  You don't see that?
       

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Thu Apr 11, 2013 at 05:06:14 AM PDT

      [ Parent ]

    •  Or just reform the filibuster process (1+ / 0-)
      Recommended by:
      Sunspots

      and allow a majority vote in the senate to pass legislation that hasn't been watered down.

      Senate Dems could put an end to all of this nonsense if they wanted to.

      It is an old strategy of tyrants to delude their victims into fighting their battles for them. FDR

      by Betty Pinson on Thu Apr 11, 2013 at 06:02:11 AM PDT

      [ Parent ]

  •  Thanks, Persiflage for the great diary (3+ / 0-)
    Recommended by:
    elwior, Horsefeathers, nannyboz

    "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

    by allenjo on Wed Apr 10, 2013 at 09:20:31 PM PDT

  •  Okay there's a lot of inaccuracies in this (8+ / 0-)

    post...

    But I don't want to nitpick, because the base message you're sending is true: this is downright wrong of Obama and a total deception.

    BUT for the record here's a couple corrections:

    1) As many who receive SS know, the COLA in CPI-W (core) does not include food or energy (the argument is that these add a component of volatility to the index which smoothens out over time when removed).

    2) "Chained" Core CPI-U(W) includes substitutions for many non-food, non-energy goods -- but it is not an accurate representation of what ELDERLY individuals consume.

    3) Elderly individuals consume a basket that is not only more narrow than the general urban population, but is also largely not substitutable (you can't really trade down to cheaper healthcare, rent...) -- and therefore they more closely follow an experimental BLS index called CPI-E (Experimental, Elderly). Core CPI-E is higher than Core CPI-Urban (current index). But, if you "Chained" Core CPI-E, you actually end up, mathematically, roughly with the current index of Core CPI-Urban.

    So there is a case for "Chaining" CPI (in general) to account for substitutions.

    BUT what is largely ignored is that the current unchained CPI already under-states the consumption basket faced by the elderly.

    AND if you CHAIN the NOT-used CPI-Elderly, you basically just end up with the current CPI measurement anyway!

    Thus, as you make the general point, there is no reason to Chain CPI, it needs to be stopped.

    Deficits don't matter, jobs do.

    by aguadito on Wed Apr 10, 2013 at 09:56:47 PM PDT

    •  As I mentioned, downstream, I am aware of (3+ / 0-)
      Recommended by:
      allenjo, Sunspots, JesseCW

      the technical inadequacy of some of my statements.   Likewise, if I tried to explain our 14,000 page tax code and how it screws the middle class and poor, I'd make some errors.

      The point is, numbers may not lie, but liars can number, and we have to look at the big picture.  The big picture is that the chained cpi screws those who can least afford the screwing.

      And, being screwed slowly over time versus screwed all at once has the same end result.  You're screwed.  The difference is only how soon rat-on-a-a stick starts to be the new norm for gourmet dining.

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Thu Apr 11, 2013 at 04:30:07 AM PDT

      [ Parent ]

    •  Outstanding comment. NT (1+ / 0-)
      Recommended by:
      Persiflage

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Thu Apr 11, 2013 at 06:04:26 AM PDT

      [ Parent ]

    •  Except that you can trade down to cheaper (0+ / 0-)

      healthcare.  Just use guided meditation CDs and a heating pad instead of blood pressure and arthritis medication.  The same goes for rent, just live in your car or a campground rather than in a house.  They aren't very good substitutions but they are perfect valid, especially under the proposed Superlative CPI (s-CPI-U).

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

      by Throw The Bums Out on Thu Apr 11, 2013 at 10:58:36 PM PDT

      [ Parent ]

  •  Im sure Mr Fierce Advocate isn't done with SS yet. (3+ / 0-)
    Recommended by:
    allenjo, elwior, Sunspots

    There's lots more Hostage Taking to come. Lots more. BHO doesn't even pretend to care anymore. No more elections that he cares about.

  •  So if the price of Strawberry's drops (1+ / 0-)
    Recommended by:
    radical simplicity

    is that pink slime or just a deal on strawberries?

    It sounds like many are trying to reverse engineer the calculation to mean the option choices people make based on their income rather than based on the prices of the goods. So greater income makes people more frivolous with their money?
    Or they skimp with less income?
    If the price of a particular good goes up more than others, less of it will be purchased, even water, if income is constant. Technology does mitigate inflation. That's a primary purpose of innovation.
    If the price of cat food goes up compared to tuna. Your cat might enjoy it.
    A rising cost of fossil fuels will induce a demand for alternative energies.
    The assumption that higher standard items will price inflate more relative to lower standard items isn't supported.

    Also demand drives price. If the demand for pink slime goes up and the demand for beef goes down, because the price of beef inflates faster than slime. The result will be to drive the price of pink slime up and the price of beef back down.

    •  eeh (2+ / 0-)
      Recommended by:
      elwior, fisheye

      Honestly I don't see a point in going into the details here.

      Because it makes me look like I support Chained CPI for seniors when I do not.

      And the benefits are already so low, so any cut is unacceptable.

      But from a strictly technocratic point of view, "chaining" inflation measurements to account for substitutions is a legitimate thing.

      And food/energy is not included in the core COLA adjustments for any benefits.

      But in the context of the discussion these kinds of nit-picking details are irrelevant.

      Benefits are already too low and should not be compromised.

      Deficits don't matter, jobs do.

      by aguadito on Wed Apr 10, 2013 at 11:07:53 PM PDT

      [ Parent ]

      •  I agree. I would support expanding benifits (0+ / 0-)

        I guess I just don't like bad arguments even for policy I support.

        Even the wiki page explains how a persons income is the baseline factor for their benefit amount. And growing income disparity accounts for 43% of the projected future funding shortfall. Income transfer to above the SS cap range.

        So the .3% difference between CPI methods is really not addressing the problem or affecting it very much, except as a political lightning rod. Imo.

        Your tag, explains it. Income within the SS cap range is the primary factor to funding SS and bolstering higher benefits. Any time a person who brings home less than the cap amount get's a raise SS is more secure.

      •  Is it still legitimate regardles of how good (0+ / 0-)

        of a substitute it is?  For example, substituting classical music CDs for blood pressure medication (both lower blood pressure, right?) or even cutting pills in half against doctors orders (substituting half your prescribed dosage for the full dose).  Or if you prefer, substituting animal feed plus vitamins for regular human food (after all, both keep your belly full and prevent you from starving or dying of malnutrition).

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

        by Throw The Bums Out on Thu Apr 11, 2013 at 11:00:44 PM PDT

        [ Parent ]

  •  Unforced error (3+ / 0-)

    President Obama done stepped in it this time. The only question is how long will it take him to stop sawing off the limb he has crawled out on and climb down from the tree. He can be expected to try persuading the left that he is doing what's best, but the left is not going to accept any of it. He's not going to get any support from the Republicans. Does he think Boehner will help him?

    He'd better have an exit strategy before he finds that he is the lamest of lame ducks, who gave away the store and got nothing in return.

    I don't see any easy way out. His presidency is in big trouble, and it's all his own doing.

    The only question worth asking a Tea Party Republican is "What do you want to be when you grow up?"

    by ebrann on Thu Apr 11, 2013 at 03:03:14 AM PDT

  •  Many ALREADY buy shit and CAN"T go down more! (4+ / 0-)

    That's the double whammy IMO.

    Huge chunk of disabled people on SSDI (moi) and elders on SSI RELY on it for their MAIN income.

    IT is such a low number that these people are NOT buying hamburger or steak now. THey are not buy peaches.

    It's a slap in the face to pretend that we can go down to LESS GOOD food, say, or Medicine (what's less expensive than the generic? NONE!) or HEAT (I already have mine set at 50 all winter so I can have hot water).

    When people live on a very low fixed income they CANNOT buy cheaper versions of stuff. Chained CPI makes sense in the abstract only if you do not consider Who We Are Talking about ie the context.

    And they aren't. IT's an abstraction to them. I heard it explained as "people buy chicken not steak".

    My though was "F you"! on a low fixed income chicken is a rare luxury.

    Not only is it MEAN it is UNREALISTIC and NOT LOGICAL to apply chained CPI argument to those on low fixed income.
    F them all!

    •  Somewhere there's a well-paid statistics wonk (1+ / 0-)
      Recommended by:
      Sunspots

      who will readily equate rat-on-a-stick as an acceptable "substitution" for other proteins.  The new "basket" (if it included food...and it sometimes doesn't) would reflect that the cost of living didn't go up.  He/she meanwhile will be enjoying a steak lunch at the Palm talking about all the whining, sniveling liberals who are complaining.

      Obama is that wonk.  When they start serving rat at the white house I'll back off.  Not until.   I think you agree.  Thanks.

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Thu Apr 11, 2013 at 05:21:15 AM PDT

      [ Parent ]

    •  Meat in easy to cook form (0+ / 0-)

      is generally $4-5/lb. for beef, chicken, turkey and pork.

      The turkeys are only cheap for the ONE week before Thanksgiving.

      Cabbage is cheap for the ONE week before St. Patrick's Day.

      The supermarket nearest me (closed while being upgraded to make space to sell higher profit items [which will drive a chained CPI higher]) doesn't vary the price of bananas, limes, lemons, or milk.

      •  I find the prices differ between meats but (0+ / 0-)

        am am unfortunately buying smaller amts...small freezer, live alone.

        At the amt I can purchase at once, I can get chix cheaper than red meat.I don' t buy pork. Turkey costs more than both so I don't consider it.

         Fish is more than both (except canned fish, but there are only so many sardines one can eat. Canned tuna they say should be once a week or less d/t mercury. I do like canned salmon but it's a bit more $$).

        I wish I could get some fresh or frozen healthy fish for a decent price. Unfortunately perhaps I know about mercury levels and folllow that. I also cringe at eating at the top of the food chain, and I know some farmed fish is not healthy.

        People don't believe it sometimes aka "just eat beans and rice" but having lived BOTH ways it is MUCH harder to eat healthily on food stamps.

        I've gained almost 10 lbs and can't see how I changed my diet-I only know that I have had much less money over the past year (same period as wt gain). No wonder poor people in our country now a days tend to be heavier.

        It's bad for my cholesterol. Heart disease in the making. Thanks, poverty!

  •  Obama has broken my heart (2+ / 0-)
    Recommended by:
    Sunspots, Persiflage

    I joyfully endured bitter cold to watch as he was inaugurated because I was warmed by the hope he put in my heart after 8 years of GWB. With bush at least I knew he was an asshole before he even took office. What we have now is an absolute betrayal and it makes me sad and angry and very disgusted.

    ...and who, disguised as rambler american, mild mannered commenter for a great Democratic web blog, fights a never-ending battle for truth, justice and the American way.

    by rambler american on Thu Apr 11, 2013 at 05:11:55 AM PDT

    •  You're kidding me. (0+ / 0-)

      This is a joke right?  You're not really serious are you?  Your  heart is broken over a cut in benefits of $26 per individual, $40 for a couple over a year?  The definition of absolute betrayal is a cut of a little over $2 a month in order to get all the positives in the budget? Either you don't really understand what you are talking about or you are way too sensitive.

      •  Well, one of us clearly does not understand... (0+ / 0-)
        The Obama Administration and members of Congress are considering, as a means of deficit reduction, a legislative change to the consumer price index – the so-called “chained CPI.” This change would have a particularly negative impact on Social Security benefits – here’s why:

        1. Chained CPI compounds over time.
        As a result of a chained CPI, there will be a 0.3% annual cut in Social Security cost of living adjustments (COLAs). Since this compounds over time, it would end up cutting the equivalent of one full month of benefits each year from a 92-year-old beneficiary. And it’s not a small cut overall – Social Security loses $112 billion over the next 10 years.

        2. The greatest impact will be on the most vulnerable older Americans.
        As retirees age, they have less income, fewer financial assets, and are more dependent on Social Security. Specifically, women tend to live longer than men and tend to have lower incomes, so women and poorer households are more at risk of falling into poverty with any cuts to Social Security.

        3. Benefits for disabled and retired veterans would be cut.
        3.2 million disabled veterans and another 2 million military retirees would see their benefits cut if chained CPI is adopted. Permanently disabled veterans who started receiving disability benefits at age 30 would see their benefits cut by more than $1,400 a year at age 45, $2,300 a year at age 55 and $3,200 a year at age 65.

        4. Chained CPI is a less accurate measure of inflation.
        Since retirees spend much more on medical care than working-age Americans, the current CPI calculations already underreport the rapidly increasing health care costs experienced by seniors. Moving to a chained CPI would exacerbate the gap between formula and actual costs.

        5. Social Security does not drive deficits, and shouldn't be cut in any budget deal.
        Social Security is a separately financed, off-budget program – it is not a driver of deficits in the rest of the budget. Any changes to Social Security should be handled separately, not as part of a budget deal that focuses on near-term savings that harm current retirees.

        and
        The chained CPI would modify the way the cost-of-living-adjustment (COLA) for Social Security is calculated, cutting benefits by $127 billion dollars over the next 10 years alone. That comes out to over $2000 in lost benefits for the average senior.
        -AARP

        Where'd your numbers come from?

        ...and who, disguised as rambler american, mild mannered commenter for a great Democratic web blog, fights a never-ending battle for truth, justice and the American way.

        by rambler american on Thu Apr 11, 2013 at 07:32:17 PM PDT

        [ Parent ]

        •  My numbers come from calculating it in a real way. (0+ / 0-)

          The only thing which compounds over time is the savings. But for the Senior this isn't money they save, it is money they spend over the time period of a month.

          What does a 0.3 percent reduction in COLA mean on a monthly basis for a Senior? This year's COLA is 1.7% so under Chained CPI the COLA it would be 1.4%.  The SSI Federal Payment Standard for 2012 of $698 for an individual will increase $12 in 2013  to $710 a month.  Under Chained CPI this would have only been $9.77, a difference of $2.23 a month or $26.76 a year.

          Let's look at couples. This year's COLA is $18 per month. Under Chained CPI it would be $14.62.  The yearly difference is $40.56 a year.

          That's what we're talking about, not some 10 year compounded average.  For the individual Senior it would mean they would need to make do on $2.23 less.  Is this really some catastrophic event?  Isn't this something that we as children or we as a community can handle for our Elderly.  Isn't this a fair trade off in order to get increases in infrastructure and unemployment insurance?

          •  The comment above by rambler (1+ / 0-)
            Recommended by:
            rambler american

            negates your argument because SS isn't the culprit anyhow.

            I suspect we'd all like to see the defiit reduced and the budget balanced.  There are many ways to do that without doing it on the backs of the people listed above by rambler.

            My republican Senator is a typical slash and burn guy.  Yet, he saw to it that my state got $400K+ for a damned teapot museum.  The Prres keeps taking people to dinner at the most expensive hotel in Wshington...on my money.  Some Congressman caused a contract for way less expensive repair part for the Blackhawk helicoper to be negated so we-the-people could buy the same part at 6X the price from a company in his home state.  

            So...where's the real sacrifice?  Easy...screw the old and powerless...a little today, a little more tomorrow..while the fat cats continue to piss away $Billions.  

             

            The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

            by Persiflage on Thu Apr 11, 2013 at 11:35:22 PM PDT

            [ Parent ]

      •  You are aware that amount could easily (0+ / 0-)

        mean the difference between eating and not eating, right?  But I guess you don't mind seniors having to not eat for a couple of days each month because "the positives outweigh the negatives", right?

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

        by Throw The Bums Out on Thu Apr 11, 2013 at 11:02:38 PM PDT

        [ Parent ]

  •  They are handing us a shit sandwich and telling (2+ / 0-)
    Recommended by:
    Sunspots, Persiflage

    us that it is roast beef.....THAT is the "substitution" involved in the chained CPI.  People on fixed incomes....which are called FIXED incomes for a reason...have no where else to cut and yet they STILL won't go after the banks and corporations who have all the money that they have stolen from us for decades!

  •  The Rescue Rangers actually decided to include (0+ / 0-)

    one diary on the most important topic being discussed right now?

    It only took three days?

    Yeah.  That's about par for that crew.

    dEar Ellois: U send Fud down holez, we no eaTz u. That iz deAl. No forget. MooRlockz Haz 2 eats. Stoopid Elloiz.

    by JesseCW on Thu Apr 11, 2013 at 07:56:58 AM PDT

  •  This is just extension of an old old shell game (2+ / 0-)
    Recommended by:
    Over the Edge, Persiflage

    with the CPI: Pull out any item that's going up in price using some bullshit argument, no matter how essential it is to human existence. Meanwhile, keep or add anything that's stationary or actually coming down in price, no matter how esoteric. So you toss in the cost of a tablet or a big-screen TV while removing things like food & energy ("too volatile"--didn't anyone ever teach you PhD economists how to crank a moving average?).

    I said to my financial advisor a few weeks back that the claims of 2-3% inflation are total bullshit. He told me the unspoken consensus in the financial sector is 8%. Frankly, in the things that matter to geezers like me, I think it's closer to 12%. You can see that most easily in sale prices. (E.g., in central MD over the last 2 years a pound of non-organic strawberries could be found about half the time on sale for $2 in various supermarkets. Until recently, when the sale prices featured in the weekly ads abruptly jumped to $2.50, everywhere. That works out to an increase of 12.5% per annum.)

    I wouldn't object to a "chained CPI" so much if it were only chained to things people actually need and use, in the forms they need and use them.

    BALTIMORE RAVENS--SUPER BOWL XLVII CHAMPIONS! WOOO-HOOO!

    by Uncle Cosmo on Thu Apr 11, 2013 at 08:41:18 AM PDT

  •  Chained CPI (0+ / 0-)

    The basic CPI-C tends to be tilted toward the upper middle of the income distribution.  For example, there were no smartphones in 1990.  At some point, the basket was adjusted to include things like that.

    How you do this adjustment is controversial.  Let's consider television sets.  Obviously, a 29" television set is cheaper, in real dollars, than a 29" set in 1980.  This already shows up in the CPI.  What they want to do is to account for the difference in functionality then and now.  This is extremely subjective.  (My parents don't give a crap about HDTV and can't figure out why I make a big thing about it.)    (If chained CPI is so good, why don't executive relocation advisors, who generate their own cost of living metrics, use it?)  

    There are other subtleties.  In real terms, new cars cost somewhat more, in real terms, than cars did in 1970.  However, in addition to being vastly superior in terms of product content and engineering and fuel economy and safety and being good to drive, they also last much longer (the most abysmal 2013 models in terms of repair frequency are better than the Toyotas and Hondas of the 1970s).  The lifecycle cost is cheaper.  However, unless Tata decides to become the next Yugo in the US, nobody is going to put a cheap, unreliable car on the market (remember that, thanks to the Intertoobz at both the retail and wholesale level, the used car market is becoming more transparent).  The best approximation is to basically say "midsized car, average configuration."

    Oh yes.  The CPI-C usually understates the cost of living for people below median income, who basically consume food, housing, clothing, medical care, and transportation, and not much else.  Food has about tracked the overall CPI, clothing (the smallest component for low income people) has declined, and we all know about medical care.

    As always, don't look at the economic rationale, but the social policy.  Conservatives and the Serious People are convinced that Americans are spoiled because their TVs are higher resolution, they have the Internet, and their cars are better.  Baby boomers are especially bad (remember that in VSP circles, all baby boomers are hippies who go into debt to overconsume and who do drugs, and, worst of all, talk back to their betters).

  •  On an individual level we may substitute (0+ / 0-)

    quite a bit, but on a national level we don't do so very much.

    The CPI is computed at the national level.

    •  What IS your point? (1+ / 0-)
      Recommended by:
      burlydee

      I assume you've heard about the guy who drowned in the lake that averaged 18 inches in depth?    

      The c-cpi is regressive.  It hurts the poor the worst...and spreads some damage on it's way up thru the rest of the population...till it reaches the folks who have money to burn.

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Thu Apr 11, 2013 at 11:59:18 AM PDT

      [ Parent ]

  •  I'm always distrustful of explanations which use (0+ / 0-)

    something it is not to explain what it is.  Instead of talking down to people why not actually explain what Chained CPI is in the way it is actually calculated. I read your post and am no smarter now than I was before I read it.  You could have saved yourself and everyone a lot of time by simply saying Chained CPI sucks because that's all you are really saying.

    And unless Chained CPI works by substituting things that are good for you with things which are actually bad but costs the same as what was good for you before, your hamburger=pink slime analogy is intentionally prejudicial - not that hamburger is actually good for you.

    •  Sir, I wasn't talking down to people (0+ / 0-)

      and if you are so smart and capable and expert, why don't you write a diary on your understanding and thoughts.  I don't mind your negative comments or contradictions.  I stated upfront I wasn't an expert and that there were problems with my interpretation.  OTOH, when you get personal, I resent it...but only to the degree that I simply pass gas in your general direction and move on.  This IS a blog...ya know!

      As a matter of fact, my wife and I help support a relative whose sole income is social security.  She gets about $900/month.  After rent and basic utilities there's not much left.  Very little.  So, we see to it that she has what she needs to live decently.  What if we couldn't?  She's 92...has faiing vision and can't hear very well.  Why would I be supportive of taking anything away from her when there are so many other ways to fix the deficit?  Why would you?  On principle?  Shared sacrifice?

      Bite me.  

       

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Thu Apr 11, 2013 at 11:53:00 PM PDT

      [ Parent ]

  •  What the numbers are: (0+ / 0-)

    Instead of talking about Hamburger vs. Pink Slime, how about talking about what Chained CPI actually means.  According to Wikipedia:

    Since 2000, on average, the Chained CPI has measured inflation between 0.25 percent to 0.3 percent lower than CPI-U and CPI-W.
    I've heard this figure discussed elsewhere so I'm fairly certain this is an accurate reflection of the difference between the old way of calculation of COLAs (Cost of Living Adjustments) and the new way - the senior would see not see his payment go down by that much, only the increase to his payment lowered by that amount.

    Let's look at what that actually means:

    Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 62 million Americans will increase 1.7 percent in 2013.
    So under Chained CPI the COLA would be 1.4% using the max average (.3% less). The SSI Federal Payment Standard for 2012 of $698 for an individual will increase $12 in 2013  to $710 a month.  Under Chained CPI this would have only been $9.77, a difference of $2.23 a month or $26.76 a year.

    Let's look at couples. This year's COLA is $18 per month. Under Chained CPI it would be $14.62.  The yearly difference is $40.56 a year.

    Really folks?  This is what people are so up in arms about? A difference of $40 per year per couple? And the trade off is all the positive things included in the budget? Instead of being so up in arms about this maybe there should be some diaries about how grown children should figure out a way to chip in 40 bucks a year to stop their their elderly parents from having to digest massive quantities of pink slime...

  •  Please sign White House petition (1+ / 0-)
    Recommended by:
    nomandates

    There are various petitions regarding chained CPI, but the petition on the White House website is dying because of the lack of signatures.  It is sponsored by “the Social Security Defenders of Daily Kos”.  At present, there are approximately 2000 signatures.  In order to have President Obama respond to this petition, an additional 98,000 signatures are needed by April 20.
    Please sign this petition so that Obama will have to respond. There’s not much time left.

    https://petitions.whitehouse.gov/...

    •  Because so many diaries are posted here daily... (0+ / 0-)

      it is unlikely that very many people, if any, will see a comment posted in a diary the following day. Now that you've gotten past the initial waiting period to post comments, rvtravel, this probably won't be an issue in the future.

      Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

      "Compassion is not weakness, and concern for the unfortunate is not socialism." Hubert H. Humphrey

      by nomandates on Fri Apr 12, 2013 at 06:30:11 AM PDT

      [ Parent ]

  •  they need to rename it (0+ / 0-)

    "CHAINED" CPI...it doesn't even come close to describing the calculation. "Chained"....first thought that comes to mind? Not Good!
    When I did my own research and realized it was about "substitutions" in the market basket that determined the cost of living adjustment I thought..hmmm better start with brand name expensive stuff first to boost the base price so I can buy lots of the regular stuff later down the road.

    Oh,.... it doesn't work like that.

  •  I actually knew about how the (0+ / 0-)

    substitution generally worked.  But I was disappointed that you chose to go the pink slime route and couldn't give something more substantive about what types of substitutions are allowed under the chained method.

    But this is DK right?  So as long as we keep manufacturing as much poutrage as we can about things we only half understand, we're all good with that.

    I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

    by Satya1 on Fri Apr 12, 2013 at 05:20:50 AM PDT

    •  I'm sorry I'm not the expert you wanted. (0+ / 0-)

      I didn't claim to be.  I tried to find the specific contents of the basket and couldn't.  Perhaps you can.  I found categories.  

      There are numerous hypothetical examples of substitution available, and in my mind pink slime made as much sense as some of the examples given.   So does rat-on-a-stick, because numbers and "substitution" theory don't actually have to eat or pay the bills.  Real people do.  And, I happen to think there are lots of less regressive ways to solve our spending / revenue problems.

      Yes, this is DK...and your response is characteristic of those who have little to contribute but are always anxious to denigrate what others say.  So, go have a nice pout about how things aren't presented the way you see them and pat yourself on your all-knowing back.  Phfttt....

      The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

      by Persiflage on Fri Apr 12, 2013 at 07:36:14 AM PDT

      [ Parent ]

      •  Here is my little contribution (0+ / 0-)

        http://www.economagic.com/...

        You will find numerous detailed commodities (at least 3 variances of ground beef for example).

        I admit my second paragraph in the earlier comment was over the top.  But I don't believe progressives help people in need by editorializing through distortion of the facts. That's GOP stuff.  We're supposed to be the fact based and the reality based ones.

        And having spent numerous years working with poor, socially isolated elderly, I'm acutely aware of of the consequences of tightening resources for them.

        I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

        by Satya1 on Fri Apr 12, 2013 at 04:29:23 PM PDT

        [ Parent ]

        •  Sometimes hyperbole is needed to get (0+ / 0-)

          peoples attention.  And, BTW, if you think facts change people's minds (as I used to) there are a lot of learned books that say otherwise.  

          Some years ago I took a video course entitled "Who you are is where you were when."  It was a corporate rage back in the 80's.  You ought to see if you can find it at a library (it's expensive to buy...still) but it will set you back on your heels.

          The longer I live, the clearer I perceive how unmatchable a compliment one pays when he says of a man "he has the courage to utter his convictions." Mark Twain

          by Persiflage on Sat Apr 13, 2013 at 12:13:03 PM PDT

          [ Parent ]

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