REAL Inflation Rate is Less than 1%

[dualstow]

A non-satirical post from Tom!

If I can extrapolate from Jan and Feb, my 2021 expenses won’t be much higher than 2020 expenses.
What’s higher is the taxes i’m about to pay. Sold a lot of stock. And that, of course, is separate from expenses. Real estate tax also went up, and I suppose I can think of that as rent.

[mathjak107]

We have not needed an inflation adjustment in 5 years as somethings went up and some down

[Kriegsspiel]

And FWIW, massages here went up 20% to make up for the lost revenue during the lockdowns.

Yea, wouldn't that make sense? I've seen many commentators say something to the effect of 'there's a lot of pent up demand, but are people with pent up demand for haircuts going to go get 3 or 4 haircuts to make up for the last year of none?'

The service providers trying to prices to regain some lost productivity sounds plausible. If they can rely on plumped-up unemployment benefits, it seems like a safe play.

[dualstow]

A non-satirical post from Tom!
...

Dualstow, you totally missed his point, and satire. His expenses only stayed flat bc he eliminated non-essentials. Taking only food, rent and health ins into the calculation, inflation is 10%.

And FWIW, massages here went up 20% to make up for the lost revenue during the lockdowns.

Wishful thinking on my part perhaps.
At first I thought it was going to be a joke about massages (too soon?) but it said therapy and then he put in details about it being shut down. When I cleared that, I thought it was a “real” post and I thought the numbers were close to unchanged. They’re not. Darn. Back to bed.

[I Shrugged]

I have never bothered much with the conspiracy theories of government inflation numbers being suppressed. But they are. My god, $100 buying name brand products at the grocery store, barely covers the bottom of the shopping cart.

Housing is computed all wrong. They ask homeowners what their home would rent for.

Etc. All I can say is I'm glad to be part of the 1%, and now a left wing democrat. I'm in with the in crowd, baby!

[SomeDude]

I used to eat lot's of ribeyes for about 8.99 a lb. Now i switched to catfood at close to 7.99 a lb. So actually Tom's right.....dissinflation guys.

[Tortoise]

Is dissinflation when the number of people dishing out “yo’ mama” insults is increasing faster than the number of people with mamas?

[mathjak107]

That is incorrect ...CPI substitution is always in like kind ..steak is never subbed for chicken ..just like ice cream on sale is never subbed for fruit.

Many times you can get better cuts cheaper than the cuts that you were using, that would be a sub

......."........
The Substitution Bias
a weakness exists in CPI index that economists have come to recognize. We call it the substitution bias.

The substitution bias is a weakness in the Consumer Price Index that overstates inflation because it does not account for the substitution effect, when consumers choose to substitute one good for another after its price becomes cheaper than the good they normally buy.

[mathjak107]

Exactly, we as users make our own substitutes..but these substitutes we do is very different than the cpi which does not go out of type ..we tend to see less inflation more often than not compared to the CPI which has subs restricted.

I know I won’t buy my sugar free Klondike’s unless they are on sale and half the price ....I will buy pudding or something else much cheaper .

We only buy certain items at Costco ...we go to local ethnic markets sometimes where lots of stuff is way cheaper than our neighborhood stores

[mathjak107]

The CPI is Not really a cost of living index ...it is only a price change index that reflects the 1500 mini economy’s that make up this country .that simply takes good and services , looks at prices and takes the temperature of the country .

IT in no way is a cost of living index ...a cost of living index would take in how many times you buy something x the price x a quality index as higher priced products may have bigger price increases but last longer ..plus it would have to contain your substitutes...so in no way is the CPI anyone’s cost of living index

[dualstow]

.

Ok, Pug, now this thread is at least half non-satirical and I am learning from it.

[Mark Leavy]

Ok, Pug, now this thread is at least half non-satirical and I am learning from it.

Like all things in life, the trick is figuring out which half.

Bon courage!

[dualstow]

Ok, Pug, now this thread is at least half non-satirical and I am learning from it.

Like all things in life, the trick is figuring out which half.

Bon courage!

I am convinced that TomFoolery serves as the sarcastic arm for another account. I think it’s prudent to take 0% of TF’s posts at face value and to focus on Jonathan Swift.

[mathjak107]

The CPI is Not really a cost of living index ...it is only a price change index that reflects the 1500 mini economy’s that make up this country .that simply takes good and services , looks at prices and takes the temperature of the country .

IT in no way is a cost of living index ...a cost of living index would take in how many times you buy something x the price x a quality index as higher priced products may have bigger price increases but last longer ..plus it would have to contain your substitutes...so in no way is the CPI anyone’s cost of living index

But it does serve as a cost of living index, that's why the government pegs social security benefits to it.

It does take into effect how many times you buy something X the price because of weightings of each individual item. For example, housing is like 40% to 50% I think of the whole CPI because it's a bigger weighting of your annual spending. Pudding might only be 0.01% of the CPI.

It's a weighted index, not an equal index, so in that way it does take into account how much of each thing you buy. Everyone eats a different amount of pudding so they have to make an estimate on average pudding consumption per year when figuring the ratings.

Just because the govt does something doesn’t mean it serves the intended purpose...it can NEVER ACT AS ANYONES COST OF LIVING GAUGE ..

Like I said , not only does it include so much that we don’t use in good or services but without especially taking into account how many times you buy or do things it is meaningless ...

It is only an index that measures price changes ....that is not a cost of living index ..in fact it is an average of the whole country ...you may pay two times for things the cheapest place does .

So while it is used for cola adjustments even those adjustments reflect no ones cost of living

[WiseOne]

I think that's the idea behind "chained CPI". Cost of travel goes up so you reduce travel and buy jigsaw puzzles and garden seeds instead. Great in theory.

I had a similar experience here. Grocery, real estate/coop maintenance, and lots of household items went way up in cost. Like, > 10%. But, because I'm no longer commuting to work, I have fewer expenses in other areas. In my case, the daily commute was already almost free (I walk), but now I get to eat lunches and make coffee in my own kitchen instead of buying overpriced crap at work or convenience foods for bag lunches. Business travel always cost me a lot more than I got reimbursed for, e.g. incidentals, the cat sitter, meals that my university wouldn't reimburse for etc.

Then there's clothes...isn't it hilarious that nobody has bought pants, socks or shoes for the past year? I sure haven't. No dry cleaning bills either. I've given talks to international audiences of several thousand people wearing a very nice top and blazer, with my hair done nicely etc. AND, flannel pj pants and slippers! I LOVE IT!!! Plus of course the fancy clothes are gone as soon as the zoom link is severed.

There's an empty office building in the residential town that my mom lives in, with a sign out front: "You're better off back at the office. And yes, you have to wear pants."

[mathjak107]

Half of all rentals in nyc and the boroughs got no increase in rent ...that is because half the rentals are stabilized so millions of people have seen no increase .

I got a reduction in car insurance...

Travel , clothes , etc all are down ..eating and ordering in from door dash way up , gas down by half ....even things like tolls which are brutal here in New York are way down since we have not been seeing the kids

[SomeDude]

even things like tolls which are brutal here in New York are way down since we have not been seeing the kids

Hopefully the city can increase taxes elsewhere to make sure the budget to maintain roads is in place. I am wistful of the times I've visited NYC. Beautiful city, great example of a city done right.

Don't you think better path is to increase economic activity through less government? Won't higher taxes just drive businesses and the working class away?