REASON # 429 NOT TO BELIEVE THE GOVERNMENT'S "CORE INFLATION" FIGURES
According to Reuters, spending on health care in the United States ballooned to two trillion dollars in 2005. That was an increase of 6.9% from 2004, after a 7.9% increase from 2003. At this rate, the increase for 2006 might only have been 5.9%. We'll just have to wait and see.
Incidentally, to put this in perspective, that $2 T figure is greater than the GDP of every nation on earth except the U.S. and Japan. It represents over 4% of the world's combined GDP.
In my favorite quotation from the piece, we learn that the health care increase of 6.9% "outpaced a 3.4 percent rise in inflation in 2005." Makes me wonder what the 2005 inflation figure would've been had health care been included in the artificial "basket of goods & services." A little bit more than 3.4%.
If health care, housing, education were included . . . well, we'd sure need a big basket, huh?
Incidentally, to put this in perspective, that $2 T figure is greater than the GDP of every nation on earth except the U.S. and Japan. It represents over 4% of the world's combined GDP.
In my favorite quotation from the piece, we learn that the health care increase of 6.9% "outpaced a 3.4 percent rise in inflation in 2005." Makes me wonder what the 2005 inflation figure would've been had health care been included in the artificial "basket of goods & services." A little bit more than 3.4%.
If health care, housing, education were included . . . well, we'd sure need a big basket, huh?
posted by Mike at 9:37 AM
4 Comments:
"If health care, housing, education were included . . . well, we'd sure need a big basket, huh?"
I believe that health care is included, but it constitutues a much smaller percentage of the basket than it does of GDP. Not sure about education. Housing is included, but for owned-homes it's included in the form of "owners equivalent rent" and not in the form of home price increases.
The funny thing about that is that all the chicklet-toothed Wall Street salesmen who pitch "inflation is dead" around the clock on CNBC never mentioned OER until it started to creep up this past year. It was only then that they said that it unfairly skewed CPI to the upside. We didn't hear a peep from them about OER when it was crawling along.
Applesaucer
chicklet-toothed Wall Street salesmen
If their cosmetic dentistry bills were in the basket, we'd have Brazilian-level inflation.
Questioning The Ministry of Truth is an act of sedition.
Don't forget Hedonistic Adjustments!
Keep fudging the numbers until they feel good!
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