Thursday, May 2, 2013

The Rich Get Richer and the Government Cost of Living, GDP and Unemployment Lies

The government plays fast and loose with statistics, most of which are outright lies manipulated for propaganda purposes, especially on economic, unemployment and cost of living data.  Recently, the government decided to change how it calculates GDP and will do it in a manner that will produce significant GDP increases.

Changes in GDP measurement create growth out of thin air
The art of measuring the size of the economy just got a new box of crayons.

The Bureau of Economic Analysis announced last week it would be changing the guidelines with which it calculates Gross Domestic Product, more familiarly known as the GDP, the standard by which the size and growth of the economy is measured....

The change comes after more than five years of economic stagnation that, despite frequent claims of a strengthening recovery, have seen high unemployment and extremely slight growth in the size of the economy....

Peter Schiff describes the change as “propaganda”....

“That’s what the government does. Whenever they don’t like the results, they change the methodology for calculating those results,” Schiff says in a new SchiffRadio report.

“Now it doesn’t mean that the economy is actually any bigger, but it means they can pretend it’s bigger,” he added.

The cost of everything is rising but the government never reports in its phony baloney cost of living statistics increases in food, fuel, energy and other necessities that are driving our cost of living out of the stratosphere. As the government continues to publish low cost of living increases, we are scratching our heads in bewilderment. We intuitively understand that the government is lying.

So what gives with the governments lies about the cost of living? Well, the government has a vested interest in lying because preservation of raw and unaccountable power trumps “We the People” and their interests. However, we need to understand how and when the government started distorting its cost of living statistics.

In an article by Martin Weiss for titled “The Greatest Scam of All Time”, Weiss references the work of economist John Williams who does nothing but study and expose government financial lies. Williams runs a highly technical economic website and newsletter ( but many savvy analysts, like Weiss, shift through the stuff and reduce it to plain English. Weiss states:

The first major push for inflation-distorting reform began with the Clinton Administration. Until then, the inflation measure was based on an essentiallyfixed basket of goods.
Example: The basket included an 8-ounce steak. And no matter what, they tracked the same steak through time.
The Clinton Administration, however, argued for a variable basket of goods. If the 8-ounce steak got to too expensive, they argued, the typical consumer would simply substitute hamburger. So the government should do the same.
That wouldn’t be a measure of the cost of living. It would be a measure of the cost of survival. Yet, according to Williams, a series of complex mathematical changes in how the Consumer Price Index is calculated — giving less weight to higher priced items — essentially achieves the same goal as the variable basket of goods.
Add that to a series of other distortions in the Consumer Price Index ... and you’ve got a measure that’s so far removed from reality, it’s a joke. Instead of the 3.8% announced last week, the true inflation rate could be well over 7%.
The biggest victims of this hoax: Anyone collecting Social Security benefits. According to Williams, if the Consumer Price Index were calculated today the same way it was during the Carter Administration, the payments would be 70% larger!

The Bush Administration continued with Clinton’s policies to deceive Americans by supporting a Consumer Price Index (CPI) based on absolutely nothing except what the government wanted it to be.

Jarret Wollstein in an article titled “Towards Liberty” further clarifies the point:
According to official government statistics, the Consumer Price Index (CPI) – the mostly widely used measure of inflation – is running a very low 2.2% a year. But if inflation is so low, why is the price of everything you buy going up so fast? How do you reconcile 2% inflation with 10% to 20% annual increases in housing prices . . . 25% to 40% increases in heating bills during the past winter . . . and double-digit increases in the price of nearly everything you consume, from gasoline, to food, to movie tickets? The simple answer is that the official inflation rate is virtually pure fiction, and has been for decades. 
What we have is a situation of government induced monetary inflation that is buried under a mountain of government lies. Americans surely feel the severe impact of inflation because they understand that the cost of necessities that they buy, like food, fuel and healthcare keep rising and have been rising for a longtime. Americans are also paying a lot more for health care, another item not covered in the government lies or its consumer prices index. According to the Huffington Post, insurance costs have doubled for workers since 2002.

Health Care Costs For Workers Almost Doubled Since 2002, New Survey Finds

Health insurance costs workers almost twice what it did in 2002....
The average total cost of a family health insurance plan reached $15,745 this year....
In 2002, job-based family coverage cost $8,003.
The real culprit of rising prices is monetary inflation and government protectionist regulations that benefit corporate insiders. Simply stated, inflation is the highest tax inflicted upon us.  Inflation is the direct result of obscene government spending that essentially reduces the value of our currency to that of fiat status and a banana boat republic.

Government is the driving force behind inflation, which is precisely why the government lies about it.   The government consciously and deliberately debases our currency with deficit spending and the non-stop running of government printing presses that churns out more and more worthless greenbacks.

John Williams of Shadow Stats reports that the real unemployment rate is is 23-24%.

Inflation and rising prices aren't the only problems eating the struggling poor and middle class.  Americans are losing far more than purchasing power.  They are losing income and wealth as the US economy morphs into "The Rich Get Richer Economy" while everybody else get stiffed.

Clinton economist Robert Richter wrote:
"The richest 1 percent of Americans last year took home 23 percent of total national income. Back in 1980, the richest 1 percent took home 8 percent of total income. The last time the top 1 percent took home more than 20 percent of total income was in 1928, just before the Great Crash."
On 3/7/12 MarketWatch reported:
Hourly pay for American workers rose 2.6% in the fourth quarter, but adjusted for inflation, earnings only increased 0.4%. What’s worse, inflation-adjusted hourly wages fell 0.6% for the full year, following a revised 0.6% decline in 2011. Only the three-year period of 1993-1995 was worse for American workers.
But somebody is getting rich - the rich in America are getting richer! reported Obamanomics: Rich Get Richer, Everyone Else Poorer 
Using Census data on net worth, the Pew report found that from 2009 to 2011, the richest 7% of Americans saw their net worth climb an average $697,651 — equal to a 28% gain.

The rest of the country saw their net worth drop an average $6,079 — equal to a 4% loss.
The American middle class is stuck in the pinchers of rising inflation and declining wages and this has been going on since the 1970’s when the U.S. government started engineering the impoverishment of the American middle class by de-tethering the dollar from gold that shifted the wealth advantage to the rich and powerful at the expense of everybody else. More horrifying, we are also being taxed into acute impoverishment as our tax burden keep rising while our real wages are heading south and the cost of everything is going up.

Want proof? Just digest this Zero Hedge chart - Production Worker's Hourly Wages in Gold.

Middle class prosperity peaked in 1971 and has been nosediving on and off ever since.

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