Monday, July 25, 2011

The Myth about LOW INFLATION

In 1973 after I left high school, my first regular full-time job paid me $7.50 an hour. The rent for my nice (but modest) one-bedroom apartment cost me $275 a month. Gas was about 38¢ a gallon, and 55¢ DURING the oil embargo. My last job in 2008 paid me $15 an hour and the rent for my one-bedroom apartment was $850 a month. Gas was over $3 a gallon and the air-conditioner during the peak summer months cost me $200 a month in electricity to run. Food now costs a lot more too, much more than back in 1973.

My standard-of-living and my discretionary spending hadn't changed one iota, as my base-salary only doubled over the past 35 years while the cost of housing, food, and energy over quadrupled.

The other night on his show Ed Schultz' mentioned people with their windows open on a hot summer day because they couldn't afford $200 for an air conditioner. I think it's more because they can't afford the $200-a-month it costs for an electric bill to run an air conditioner.

The consumer price index that the government uses to gauge the cost-of-living-index doesn't include the 3 basic things that real people actually NEED to just "live".

1) Housing
2) Food
3) Energy (electric for heat and A/C)

The 3 most basic necessities that humans need - - - - that's what has gone up the most over these last few years. The government uses things like the cost of a 52" wide-screen HD TV imported from China to gauge the supposed "cost-of -living index", and EXCLUDES housing, food, and energy.

If Forbes or Reuters reports only a half a percent inflation rate, then for people on a fixed income like Social Security, that could be closer to an increase of 5% for ACTUAL inflation for them; but it's never reflected in any cost-of-living allowances (COLAS) for those who rely on Social Security. For the last 3 years they got NO increase at all in benefits, and members of Congress only didn't get a COLA because they voted to postpone any congressional pay raises as a "token gesture" because of the recession. But at $174,000 a year (+ perks), they don't need to worry about the cost of a one-bedroom apartment, the cost of food, or the price of electricity to air-condition their beautiful homes.

When COLAS are calculated for poor people on Social Security, they have been getting screwed royally because of this government false reporting of what it actually costs to live.

The government's definition of poverty for a single guy like me is $10,280 a year. If the average price of a one room apartment in the U.S. is $700 a month, housing alone would cost me $8,400 a year and does not even include the cost of heat/AC and the basic food staples, let alone anything left over for popcorn and a movie.

The same can be said for those who were forced to live on unemployment compensation insurance benefits. They are not living "high-on-the-hog" as Fox News and the Republicans would have you believe. Average UI, Social Security, and disability payments are just above the government's definition of the poverty rate.

And the Republicans want these people (on Social Security, food stamps, unemployment, and disability) to suffer even make a "shared sacrifice". If it wasn't so cruel, it would almost be funny.

Ed Schultz should do a segment about this.

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