Friday, August 28, 2009

Inflation? What Inflation?

So, Social Security payments will shrink for the first time since 1975.

Military retirees are bring told not to expect a cost of living adjustment this year.

Why? Because there's no inflation this year. That's what we're being told.

I wish someone would tell that to the grocery store, where prices have been climbing steadily for the last year or so.

I wish someone would tell that to the restaurants and burger joints who raised their prices in the last six months.

They're telling us inflation is dropping, but I'm not seeing it.



Anonymous said...

This is the gov't.
And you believe them?
Or the evidence of your own two eyes?

B Woodman

Sailorcurt said...

That's because the CPI is an index of ALL consumer prices.

Gas and oil prices have dropped since January first, housing prices have continued to decline and also consumer goods prices have decreased due to low demand.

People aren't spending on discretionary goods...aren't buying new cars or homes, and those are included in the CPI. As demand has fallen, so have prices. It's not an indication of economic health, it's an indication of economic inactivity...which is bad in our consumer economy.

That's why you haven't noticed it...the decrease in prices hasn't influenced the things that you're buying: staples like food and clothing have become MORE expensive, not less...but the OVERALL CPI has declined because the declines in prices of non-essentials has overshadowed the increase in prices in essential goods and services.

harp1034 said...

Gas and oil have dropped from the first of the year? That is pure bull. They are less than last yaer but have gone up since Jan.1,2009. BTW disabled vets are also screwed with no raise. But Congress will get thir raise.

Conservative Scalawag said...

Huh, interesting. Guess I am going to have to do a little more finacial prepping (aka saving money for the rainy day).

Sailorcurt said...

Gas and oil have dropped from the first of the year? That is pure bull.

You're right, of course.

Prices dropped fast between October and December of last year, so they actually were lower in January and have been creeping slowly back up. My memory was off by a couple of months.

My bad.

The point remains, however, that the issue is in discretionary goods. Many major retailers have had to slash prices in order to increase sales of consumer goods. That's what's driving the CPI down. The things we HAVE to buy to live have gone up in price.

That was my point.

And I'm one of those disabled vets getting screwed out of a COLA increase this year.

Moogie P said...

My Daddy's getting a double-dose of "the shaft:" he's an 80 year-old military retiree who is also drawing modest Social Security (and on TRICARE for Life, so he also has to shell out for Medicare Part B.)

How can we get "Cash for Clunkers and Caskets" calculated into the index?