Posted by Karl Denninger
If you remember just a short while ago I reported on what certainly appears to be a very clumsy scam pulled by the BLS in their so-called “inflation” reading published on the 19th of February – where the numbers they presented simply didn’t add up, and as a consequence put forward a false CPI, or inflation number.
Curiously, we haven’t heard anything from the BLS on this “error”.
This, of course, is only an “error” in that it is not the actual means by which the BLS is “supposed” to report “inflation.”
But the BLS has twice in the last 30 years revised their methodology, both times with the intent of understating “inflation.”
Why? Well, a big part of the reason is that the law says that various benefit programs are supposed to be indexed to inflation. By intentionally understating inflation Senior Citizens and others on various fixed-income entitlement programs funded by government get intentionally screwed.
The Senate yesterday rejected a $250 one-time check to Seniors and others who have been so-screwed for the last two decades:
President Barack Obama has called for Congress to approve the payments to make up for their benefits not increasing this year, but the Senate defeated it 50 to 47.
Social Security payments for the elderly and disabled will stay flat this year for the first time since 1975 because they are tied to consumer prices, which decreased amid the worst economic recession in 70 years.
Of course the real problem doesn’t lie here. As is usually the case the media won’t talk about the fact that the current inflation rate, if measured under the “old” methodology, never went anywhere near zero.
How much does this “count”? Tremendously so. Over a ten year time frame understating inflation by 7% results in your Social Security payments being half of what they would otherwise be. If the understatement is by just 3% you get a 35% underpayment at the end of a ten year period.
Of course what the media reports is the “one time” payment was rejected, but what they don’t report is that seniors have been screwed for three decades by intentional book-cooking in the government.
And by the way – no, there is no possibility of the government “fixing this” and paying what the law says they should. The money doesn’t exist.
But this scam, along with dozens of others, is how our fabulous government managed to run its Ponzi Scheme for as long as it has – a Ponzi that is now collapsing, irrespective of what you’re being told by the vacuous bobbing heads on national television.
If you’re a senior and been paying “membership dues” to AARP, you might want to ask them why their much-vaunted “lobbying” and “public education” campaigns haven’t focused on this for the previous 20 years – and why they sold you down the river.
Hope you like your kids (and they like you) Seniors, because the government tit is rapidly running dry.