Can We Trust Government Inflation Statistics?

By James Donahue

We all know that the high price of fuel to operate our cars for the trip to and from our jobs, and to run the trucks that bring food, goods and services to our communities, and the farm machinery to produce the food we eat, are driving the cost of everything right through the roof.

We also know, if we have been to the doctor lately and been given a prescription for medicine, that the price tag for those few pills in the bottle has skyrocketed.

Americans are suffering from sticker shock with every trip to the store. The price of everything is shocking us.

But would you believe that the U.S. Bureau of Labor Statistics claims a consumer price index increase of only 0.3 percent for March, 2008?

We also know that hundreds of thousands of workers in the United States are losing their jobs every month as more and more factories and businesses close their doors. But would you believe the bureau claims a national unemployment rate of only five percent?

In light of all of the lies the Bush Administration has used to get us involved in a reckless invasion of Iraq, turn our back on the crisis of global warming, dismantle our Constitutional liberties, allow torture as a way of dealing with political prisoners, and cover up for the illegal affairs of appointed officials, what makes us think we can believe statistics that belie all that we see every day with our own eyes in the market place?

The Daily Express newspaper in the United Kingdom, where rising gasoline prices are also hitting the economy like a ton of bricks, recently conducted its own survey of prices and concluded that families there have suffered an 11.5 percent hike in the cost of living over the past year.

“Our research also makes it clear that household costs are now accelerating week by week, leaping by an astonishing 0.41 percent over the last seven days alone,” the story said.

So why would the U.S. Bureau of Labor Statistics want to fudge on inflation statistics? The Express story notes the same thing is happening in England, where annual inflation measured by the Consumer Price index is only 2.5 percent.

It doesn’t take a genius to figure out what is going on here. In the U.S. there are over 50 million people receiving monthly Social Security benefits, and that number is rising yearly as that batch of “baby boomers” from the World War II era moves into retirement.

The Social Security law is designed so that payments are adjusted every year to compensate for increases in the cost of living. The last increase, that went into effect in October, 2007, was 2.3 percent, based on Department of Labor Statistics calculations for the previous year. It was the smallest increase the seniors got in their monthly checks in four years.

It is obvious that the Bush Administration does not want Americans to know how really bad the inflation rate is for this reason alone. If this administration is willing to cut services for thousands of mentally and physically injured veterans returning from the Iraq War, imagine how they plan to treat the nation’s retired seniors.

There are some ugly politics behind the fudged unemployment figures as well. Remember that unemployment statistics are calculated on the number of people who file for and receive unemployment benefits each month.

But unemployment benefit insurance provides for monthly payments of no more than $280, and the payments stop after a year. The program was designed as a temporary insurance for people who lose their jobs, giving them time to find new employment, or get trained for new jobs.

In today’s economy, with hundreds of potential employers moving their businesses overseas in a quest for less costly labor, the new jobs are simply not available. Thus hundreds of thousands of potential workers are falling off the other end of the unemployment statistic count, giving the impression that the unemployment rate is much lower than it actually is.

If you use some backward statistics you can get a general sense of just how bad the unemployment problem has become. If you search the nation’s labor statistics you find that we have 146 million people employed, out of a total employment-population ration of 62.7 percent. This suggests that 37.3 percent of the potential work force is not working.

Back during the Great Depression, it was estimated that 24.9 percent of the work force was idled in 1933, the very worst of that time.

Of course, these are statistics your government does not want us to think about. Our capitalistic economic system is built on consumer trust. If people believe everything is running smoothly, and that our economy is healthy, they will be more apt to pull out that plastic credit card and charge themselves more deeply into debt.

If they knew, however, how truly volatile our economic situation is at this time and space, they would stay home, sit on the few dollars they still have in their pocket, and eat beans for the next week. A nation of trembling bean-eaters would cause the economic system to collapse within days.