Maggie's Farm

Much of this is due to the fact we now have a completely dishonest media that simply repeats what the government tells them to say.

Just a related issue. As you know, for several years now the government has told us there is basically no inflation going on in the country. And yet I see my gas prices go up, and food prices have really been shooting up in the past year. But the government tells us month after month there is little inflation.

Do a little Googling on the subject, and you will come across studies that conclude that real inflation is actually running at about 10% per annum. What is happening is that the government simply constantly redefines what it considers "inflation" so it doesn't happen any more.

I think most of us know that the government now takes changes in the cost of food and fuel out of the inflation index, which in itself makes the officially-approved index somewhat meaningless. But it does other things as well. For example, a major component of price rise now is the cost of compliance with government mandated regulations, for example, government requirements that something must be made a certain way, which increases the price. Government, however, does not consider that inflation, however, so increases attributed to regulatory costs are now backed out and removed from the formulas.

Just as an example. Although gas prices are no longer measured as part of inflation anyway, consider the effects of mandating that ethanol must be blended into gasoline. This both increases the cost of fuel per gallon, and decreases the miles per gallon you will get because the ethanol essentially waters down the gasoline. (We won't get into the harm that it also causes to a number of types of gasoline engines). And yet none of this would be factored into inflation, even though you now have a higher price for an inferior adulterated product. (The inflation index now also does not account for the declining quality of American goods to the extent it is due to trying to compensate for increased government costs imposed on business.)

Similarly, the dramatically increasing cost of travel due to security restrictions, compliance with TSA, mergers and limitations in flight schedules are all simply redefined out of calculations of inflation, even though they have resulted in substantially higher travel costs.

What was really revealing is the reason the government is perpetuating this deception. I assumed it was merely because it wanted to look better politically. But the real reason is that many government programs and entitlements now have a cost-of-living index factored into them, so that when inflation increases the payment does too. So there is now a huge incentive for the government to lie about the actual amount of inflation in the economy.

I know if I put a link in here it will cause my comment to be sent to spam, but do a Google search on "shadowstats" and it will take you to the studies and links that explain how the government cooks the books on inflation statistics.

But will any of the media report on this? Of course not.

My guess is you could find a similar process going on if you were to do some Google research on unemployment statistics.