Wednesday, November 06, 2013

Inflation and Deflation

Deflation is good for people on limited fixed incomes -- like those on Social Security, etc. They should welcome the news that the cost-of-living adjustment is "only" 1.5% -- rather than trying to hype it higher. The bottom line is what you can get for the money -- and not simply getting more money to buy one increasingly less -- as the union and media shills would have us demand for them.

The chained (lower) CPI is correct in reflecting the reality that people have to adjust their choices -- rather than continue to buy the same things despite their escalation in price. Even the poorest persons can get $200 worth of food stamps, housing subsidies, medicaid, etc. -- that already puts them above the median income -- so that they aren't living at the poverty level.

But $200 a month of food will make one obese -- and then requiring the Medicaid from all those complications -- including that one is sitting around all day chain-smoking and pursuing their favorite addictions to while their idle time. The smarter choice would be to grow as much of their own food as possible -- ensuring a more healthful diet, which is what a chained CPI would expect one to do -- make better choices, including downsizing one's lifestyle -- instead of lamenting that they have less money for travel and gifts to the grandkids.

The downsizing of lifestyles means more used good are available at yard sales and thrift stores -- and so wealth is redistributed in that way, rather than people hoarding everything they have in the hopes that inflation will make whatever they have more valuable, which results in a more inefficient society.

So most people still "earning" money, are vested in higher inflation rates, while those on fixed incomes should be vested on lower inflation -- instead of being manipulated as dupes against their own self-interest, to fuel the greed and ambitions of the unions and media people who want to be at the top -- and in control.


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