Government Lies (and Statistics)

Posted by on Sep 27, 2012 in Economy, Personal Finance, Politics | 13 comments

The government is lying to us. I know this isn’t exactly news, because they lie to us all the time. But in this case, I’m talking about inflation. According to the most recent “official” government announcement by the Bureau of Labor Statistics on September 14, “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in August on a seasonally adjusted basis. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment. The seasonally adjusted increase in the all items index was the largest since June 2009. About 80 percent of the increase was accounted for by the gasoline index, which rose 9.0 percent and was the major factor in the energy index rising sharply in August after declining in each of the four previous months.”

In effect, what they’re telling us is that, according to their barometer, inflation is running at only 1.7% over the past twelve months, and it’s only that high because of rising gas prices. In prior months it had been below 1% annualized. This “low inflation” is just one of the many factors used by the Federal Reserve to justify QE2 and QE Forever (aka QE3). The problem is that the government keeps changing the way they calculate CPI to suit their needs, which means they will use any tools at their disposal to show the lowest possible level of inflation. Anybody who lives in the real world knows that true inflation is rampant today, and is putting a death grip on ordinary citizens struggling to make ends meet.

Consider how much more expensive it is today to buy groceries, or fill up your tank, or go to the movies, or buy a pair of jeans, or send your child to college. I could go on and on. The government is insulting our intelligence every time they tell us there is little to no inflation. Where do they live? Who’s paying for their health care, or their cable bill or for the cost of a ticket to a concert or ballgame? When is the last time they went out to dinner and paid for a steak with their own money?

The cold hard reality is that the average American is earning less and less while everything we consume costs more and more. You’ll never hear that in any of the government pronouncements. Keep that in mind next time you read or hear a report telling us that we’ve conquered inflation. Don’t believe it; the government is lying.

13 Responses to “Government Lies (and Statistics)”

  1. Hi there! I enjoy your blog and it appears we have similar tastes! I’m a new blogger, i’m in broadcast news and am trying to meet new people, please check me out, thanks!

  2. I was referred to your Blog by Brian A., I found this posting and your previous postings very interesting and on point with what is going on in the World today and how it is being run so ineffectively.

    I am looking forward to reading your future postings.

  3. I like your conclusion and agree completly.It is common problem of any goverment no matter which country it may concern. Or the problem lay in all of us. It seems we are still willing to beleive in fairy tails.:-)

  4. Thanks Greg for a very interesting Blogg on a very important subject…I too believe that inflation is totally out of control.

  5. Mike Dardano says:

    I totally agree with you Greg. The employment numbers are wrong too and they get constantly revised. You have to go with what you see in the marketplace and not depend on bad stats from the government…

    • You’re absolutely right about the employment numbers Mike (which come out tomorrow by the way). The are constantly subject to revision, and are impacted tremendously by a widely suspect methodology called “the birth/death ratio” which is a statistical smoothing based on nothing more than estimates of what should be happening in employment based on historical norms. It’s all subject to government manipulation.

  6. Greg,
    It’s hard to contradict the truth, although many of us don’t have your expertise of figuring out just how outrageous the government lies are. I do believe that the statisticians can juggle the numbers and make them support whatever vantage point they wish to present.

    There is one item that I would like everyone to consider, from the numerous issues you raised in your excellent blog. Once you are elected to Congress, congressmen/women and their families have lifetime health care. So, we the tax payers pay for their health care for the rest of their lives. They have no incentive to fix the health care system, because no only don’t they pay for their care, they are not part of the same PPO, POS, HMO alphabet soup health care system that we, their constituents are forced to battle on a constant basis.

    They have the old “Major Medical” system that existed in the mid 80’s before all the changes to the health care were made and ongoing changes making it more difficult to get the care needed and more costly. WE can anticipate this will continue and I am sure you can enlighten us as to what role our health care system plays and cost in the overall statistics relative to inflation.

    Thanks for the info, very informative.

    • Vivian, thank you very much for your thoughtful comments, especially as they relate to health care. I couldn’t agree with you more. Congress should IMMEDIATELY be forced to use the exact same health care system, at the same cost, as regular citizens. Unfortunately, that simply isn’t going to happen any time soon. Congress will remain in their little bubble, insulated from what’s really going on the country they were elected to serve.

  7. Very interesting – but I would not believe it if anyone told me that we’ve conquered inflation. We all know that its coming – but when? I’ll definitely be following you future posts.

    • Thanks Jeremy. Real inflation is here right now, in our everyday lives. The inflation that the government reports likely won’t be reported for at least two or three years.

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