Deflating Inflation and Inflating Jobs: How the Government Lies to You About the Economy...

Mark Twain said it best, “There are three kinds of lies: lies, damned lies, and statistics.”

When it comes to the realities of inflation and employment, that quote must be on every politician’s desk.

No surprise here. Since it seems to be a government function to continually lie to its citizens. All in order to short change them on the benefits it pays out… while taxing you more and to make our ‘public servants’ look like they are actually serving the public who voted for them.

Those same voters that gave them the jobs and benefits many everyday people don’t have.

They’re serving us alright, and they’re cooking the books as well as our futures.

The Government Lies About Your Cost of Living

As those who have been looking for jobs for months know, as those who go to the grocery store know, and as those who are trying to pay for medical care know, we’re all getting screwed. Meanwhile the government paints an unrealistically positive picture about just how screwed we really are.

Let’s look at inflation. Specifically, how the government deflates the reality of how much it really costs us to live, and why.

Many government aid programs like social security benefits, disability payments and others have their annual adjustments tied in with what the government tells us is the CPI, the Consumer Price Index.

Obviously, the lower the method of calculation, the lower the payout to the public. Perhaps the BLS, doesn’t stand for the Bureau of Labor Statistics, it’s actually the word Bullshit, missing some letters.

In case you don’t know, those are those good people who calculate the Consumer Price Index, or better said, miscalculate it.

The government has this concept of the ‘fixed basket’ of goods to calculate inflation. This fixed basket needs some new handles, because the only thing it can carry is the ‘bill of goods’ the government tries to sell us.

This basket contains statistics concerning groceries — the basic ones — housing costs, clothing, transportation, medical care, recreational expenses and communication expenses. It’s an historical basket, and basically ignores changes in consumer behavior, because that’s the most convenient method of calculation for the government to mislead you.

What it doesn’t consider is how corporations rip off the consumer by, for example, selling a food product for the same price, yet reducing the amount of said product. ‘New and improved’ usually refers in reality, to the profits of the corporations, and not the quality or quantity of the goods they sell.

Also, the method of Consumer Price Index calculation is proportionately weighted — by the government — to mislead consumers on the reality of price increases. The Feds assign percentages to the cost of living. A certain percentage for housing, food, and other expenses.

By playing with the figures, there is a direct effect on government’s monetary policies, what the interest rate should be for example. This can affect the cost of consumer credit, the cost of mortgages, how much we can earn from the banks, and so on.

The Substitution Con

You may have noticed the soaring mortgage rates, increased credit card interest rates, and consumer loan rates.

For example, the Consumer Financial Protection Bureau, in an analysis of the 2024 interest rates of credit cards has determined that ‘over the last 10 years, average APR on credit cards assessed interest have almost doubled from 12.9 percent in late 2013 to 22.8 percent in 2023 — the highest level recorded since the Federal Reserve began collecting in 1994.’

If we use the rule of 72—the calculation that tells us how many years it will take to double an existing amount, we see an increase of almost 7.2% per annum. It doesn’t take an Einstein to realize, that isn’t exactly what the government tells us the inflation rate is.

So, if you’re paying for the things in the ‘basket of goods’ with a credit card, even if those goods have increased two or three percentage points in a given period, if you carry a balance on the credit card you used, your costs have far exceeded the government inflation figure.

Let’s go back to that ‘basket’ of goods. There is the concept of ‘substitutions’ which means if a consumer uses a lower priced substitution for a grocery item, for example, that isn’t figured in their CPI calculation.

So Jane Doe buys chicken instead of beef, because it’s cheaper and she can’t afford beef — that doesn’t count as far as the government is concerned. Investopedia reveals the effect of substitution neatly, with ‘The change in purchases by consumers in response to price changes, changes the relative weighting of the goods in the basket. The overall result tends to be a lower CPI.’

Now, you need a place to live to put those basket items on your kitchen table. But when it comes to a calculation for housing costs, the government gives us ‘fugazy’ figures once again. They calculate that by using an estimate of the rental cost for living in a house, not the actual price increases in buying the house.

What’s the deal in housing prices in 2024? Well if we want to use some other government agency figures, then we see that the cost of housing increased 4.2% over the previous year—and who knows if this is even accurate.

How does Uncle Sam come up with that rental cost figure? Here we get some more government inspected Grade A bull, and the concept is a beauty. It’s called the OER, or Owner’s Equivalent Rent figure. How do they get that figure? The BLS (Bureau of Lying Statistics), asks consumers what they think the rental value of their homes would be.

Not exactly science.

When it comes to the Bureau of Labor Statistics calculating the CPI, it’s garbage in, garbage out. Let’s look at employment statistics.

Why You Should Care

It’s not a wild assumption, that many of the readers of this article are looking for a decent job, or know someone that is and are having a hell of a time in finding one.

The government, who is ‘here to help us’ doesn’t count those who have given up looking for jobs as unemployed. And they count freelance and part-time jobs as ‘employment.’

How does the good old BLS determine and define unemployment? They require that an unemployed person must be available for work and must have looked for a job in the last four weeks.

Oh, by the way, 40% of the country isn’t even consider in the figures. That includes individuals who are students, retirees, military, stay at home caregivers, and the incarcerated and institutionalized (which is a category in which we should place those government employees who come up with unemployment figures for the rest of us — if we only could).

You are a consumer.

You eat and hopefully live somewhere with a roof over your head. You have to pay for that, and you probably need a job to do that.

However, the reality is, it’s getting much harder to do all of that. And the government’s figures disguise it. If it feels as though things are getting more expensive, and it’s harder to keep pace. The answer is, that’s because it is… whatever the government tries to tell you.