Three Little Words Limit Severe Consequences

Those words would be "indexed to inflation."

I learned a little tidbit from the Glenn Beck show that our government purposely mis-states our inflation rate because so much of its budgetary items (like social service payments) are...you got it...INDEXED TO INFLATION.

According to our government, inflation currently sits at 4%, while REAL inflation sits somewhere between 7-12%. This means things like Social Security checks, future IRA contributions made after this year, VA/military and retirement pensions with COLA (cost of living) allowances, all kinds of disability payments, and anything else tied to inflation via a COLA is about 70% lower than it ought to be.

Does anyone know if welfare benefits, AFDC, and food stamps are tied to inflation? This is one time I sincerely hope so.

By keeping the official rate of inflation artificially low, Uncle Sam gets to shell out so much less than he normally would. Meanwhile, the rest of us have to shell out more and more for necessities while Uncle Sam sits back and enjoys his discount spread (the amount between HIS rate and the real rate). This is how he makes money when everyone else is losing it in bonds and savings, and why our so-called strong dollar policy has been allowed to lapse--how else does one control inflation rate spreads than by letting our dollar slide? The lower the slide, the more Uncle Sam profits when the stated "official" rate is kept artificially low.

Don't be surprised if more and more stuff ends up going to the "indexed to inflation" camp in the future.