2013-02-10theaureport.com

But, even with these tricks, the CPI-U still is not fully substitution based. The experimental chain-weighted CPI, the C-CPI, however, would be just that, fully substitution based. Using the C-CPI would allow the government to knock another 0.6--1% off official inflation, further reducing the cost of living adjustments to Social Security.

It's unconscionable. It's effectively a fraud. Shame on the government for trying to do that. This impacts people's retirements. There was some protest when the idea was floated as one way to deal with the Fiscal Cliff, and the politicians pulled back. I fully expect they will try to push it forward again, in the negotiations in the months ahead. Politicians should just be straightforward with the American people and say, "We can't afford to pay the cost of living adjustments that we had contracted." At least people would know what is happening and could plan accordingly.


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