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Author: mauser96 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 21198  
Subject: Re: Lies, damn lies and CPI Date: 3/24/2013 5:26 PM
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That MIT site is interesting.

However if they don't include services, they are missing out on what seems to be going up fastest in the last few years. Whereas some goods like food are used by everyone your exposure to services vary a lot. If you aren't being litigated against you may go many years without a lawyer, if you are healthy without a doctor, and of you don't have kids at a certain age you are spared tuition costs.

Some things are not what they seem. Car repair bills have gone down, but that is made up for by the fact that they cost more to buy.Not included in any method I've seen is the fact that in today's regulated world we are sometimes forced to but things that we wouldn't choose on our own.

The cost of almost all manufactured goods should actually go down with time as the technology used to design and manufacture them improves. I doubt if the same logic applies to services. Perhaps services are dependent on the complexity of the economy, the amount we spend on them goes up as economies become more complex.

I don't doubt that the government manipulates inflation data for their own benefit. And that no methodology for calculating it is perfect,, they all have to make some assumptions. But 8% seems too high, and 2% too low, for most people. Assuming a 4% figure, $100 will decline to $50 purchasing power in only 18 years, the time it takes to raise a baby to voting age. At that point the child will have a further 60 years to see a supposed store of value seep away.
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