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Originally Posted by Arne
Government has to adjust for inflation. They do it. But they will always first give you some phony numbers that they then adjust a year from now when nobody cares anymore. and the whole method in which they determine the consumer price index is pretty stupid, as well, since they take increases in quality as a price-decrease, unlike other nations do.
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So then all of the previous estimates were ALSO adjusted for inflation as well. So the running index is still valid, is it not?
Show me the "phony" numbers? If you want to quibble about how they do the CPI fine, I can see that as it's an index made up to try and measure something that's pretty much immeasurable.
I mean if the price of sugar goes up 20% because of a fire in boliiva or something, does that mean inflation is 20%? No...but it makes sense to ME, to discount volatile goods so that it doesn't skew the underlying inflation rate. What they are trying to measure is the upward pressure on wages in the economy.
Now it would seem to me that food/gas might be a part of it but that's not the way they've been doing it for years, so not one's throwing out "phony" numbers here.
Let's take your example of a faster CPU for example. Now at the moment that might be outdated as cpu's are pretty damn fast. But for quite a long time an increase in cpu power meant a......increase in productivity, it was probably significant. Now if you are talking about chatting on a message board, yeah, but doing "financial work" a quicker machine will actually improve your productivity.
Not to mention programmers, scientists, etc. Also not to mention what other industries will gain from a more responsive system. I don't know if it should be included, but at least in the past it had real impacts to the economy.