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How inflation is purposely underreported as a justification to maintain low interest rates: Two specific examples with housing and college tuition.
mybudget360.com / by mybudget360 / December 15, 2015
Inflation is largely misunderstood by the public at large. People for the most part think that inflation is the natural economic order and that prices go up naturally. Official inflation figures play a much bigger role influencing cost-of-living adjustments for things like Social Security but also serve as cover to maintain low interest rates. The CPI is largely underreporting inflation. For many young Americans the cost of college tuition is a big part of their budget yet the CPI allocates a small percentage to college tuition and fees. Another big problem with the measurement is how it looks at housing costs. You would think that the biggest expense for Americans would be reflected accurately in the official measurement of inflation but it isn’t. This is how you end up with the middle class becoming a minority yet in some way, we had continual reports that inflation was nicely controlled.
Inflation since 2000
It is worth looking at the buckets in the CPI to see where costs have risen since 2000. Rising costs have driven deep impacts into the wallets of Americans. Your dollar simply does not buy as much as it once did. Part of this has to do with inflation simply eroding purchasing power. The ability to finance purchases with big debt has simply inflated the underlying item. Think of college, automobiles, and housing. It is important to provide reasonable access to debt but we’ve crossed a line into debt addiction.
The post How inflation is purposely underreported as a justification to maintain low interest rates: Two specific examples with housing and college tuition. appeared first on Silver For The People.
Source: http://silveristhenew.com/2015/12/16/how-inflation-is-purposely-underreported-as-a-justification-to-maintain-low-interest-rates-two-specific-examples-with-housing-and-college-tuition/
