The country is run by the magic 8 ball now.
It appears that as part of the “debt negotiations”, both parties are considering using the back-door method of – once again – changing the way the Consumer Price Index (CPI) is measured. This index determines how much is given to seniors in social security, how the income tax brackets are set, and the like. They have gradually removed most items that could in any way possibly relate to the expenses that impact the average consumer (the cost of rent and the cost of energy are no longer part of the index, for example; yet these are two of the highest, if not the two highest, expenses borne by the average household).
Krugman (who I generally like) constantly makes the mistake of tying his inflation numbers with the CPI, which is now so bogus as to be laughable.
Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.
According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically.
Such a move is widely seen by economists as resulting in a slower rise in inflation. That would impact an array of federal programs that are linked to CPI including the Social Security program and income tax brackets set by the federal government.
The proposal could lower federal spending by around $220 billion over the next decade, based on calculations by last year’s White House deficit commission, which recommended the change as part of its final report.
According to two congressional aides familiar with the budget negotiations, the shift is being “seriously discussed” as part of the ongoing talks to strike a budget deal, that would be used to ease the passage of a required increase in the country’s debt limit.
Those talks involve Democratic and Republican lawmakers from both chambers and are led by Vice President Joe Biden. The group held its latest meeting Tuesday as they strive to reach the broad outlines of a compromise on federal spending by the end of the month.
In a press conference that took place before the meeting, House Majority Leader Eric Cantor (R., Va.) declined to comment on the specific proposal, other than to say that “a lot of things are on the table.” But asked whether the proposal would be interpreted as a tax increase and therefore a non-starter for Republicans, Cantor said it could be seen as both impacting tax rates and benefits paid out by the federal government.
When asked about the idea after the meeting, Rep. Jim Clyburn (D., S.C.) said everything is being discussed.
It is a rare proposal in that it would likely lead to both lower benefits paid to seniors and higher taxes paid by most people who pay federal income tax. As such, it could allow Republicans to argue they are tackling federal entitlement programs such as Social Security, and permit Democrats to say they are increasing taxes as part of any budget deal that is reached….
When we say “starve the beast”, we are talking about cutting the Pentagon war machine’s budget, or not putting money into the big banks. When Congress says “starve the beast”, they are talking about us.
[Lackey: “Sire, the peasants are revolting!”
King: “You can say that again.”]