PeakTrader.com

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PeakTrader said...

Yes, anyone who believes inflation is understated is ignorant.

Not all government agencies are the same. The BLS is "Top Gun."

However, if Americans knew the true costs of government services, they would want much fewer of them.

Americans see the government benefits. Yet, they don't see the much higher costs, e.g. fewer goods & services, higher prices, higher interest rates, and more taxes.

And they don't see how the market economy creates more value for less costs, e.g. through fewer inputs, less time, less effort, etc. resulting in more goods & services, lower prices, lower interest rates, and less taxes.

Fortunately, for the government, Americans are ignorant.

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PeakTrader said...

Some government agencies are better than others. So, $18 for the FBI (I'm assuming a year instead of a day) may be worth it, although the total costs for the FBI are much higher (for reasons I stated above).

How about something like Social Security? Someone works for 30, 40, or 50 years and pays over 6% of his wages, while his employer also pays over 6% of his wages, for Social Security.

If you invested the 12% or so in a private individual account, then after 30, 40, or 50 years, you'd receive a monthly check that's much higher than the Social Security check you'll receive from the government.

Investment = saving, except if you're the government. Then investment = spending, not saving.

We can't privatize Social Security, because the government needs as many young workers as possible to pay for the existing retired population.

We know the money has already been "invested." However, we also know a huge part of it has also been wasted.

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PeakTrader said...

Fortunately, the BLS provides more complete and accurate information by including other factors, e.g. quality improvements (new home construction and home improvements), changes in interest rates, property taxes, insurance, etc.

Yet, some believe the BLS data overstate OER:

A shrinking number of jobs and a growing supply of apartments will continue to push the Puget Sound region's rents down next year as vacancy rates climb, industry experts predict.

Job losses killed our market, and development buried it," Mike Scott, of Dupre & Scott Apartment Advisors, told landlords at an industry conference Tuesday.

To attract renters, landlords have lowered rents, and six out of 10 are offering concessions worth an average $757, according to the firm's research.

New York City Landlord Chimes In

Based on what I'm experiencing, I'd say that rents are down 10 to perhaps as high as 20% from their peaks.

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PeakTrader said...

When home prices were rising sharply, housing affordability was generally flat.

Also, although homeowners were extracting home equity, a large proportion of that equity was used for home improvements, and related household goods.

Boomers spending big on remodeling
SF Gate
January 23, 2005

America's homeowners have seen their home equity grow by a mind- numbing $5 trillion since 1995, thanks to a 70 percent average jump in the value of their houses.

...according to new research, have been liquefying part of their equity and plowing it back into their homes at a dizzying pace -- nearly one-quarter of a trillion dollars of home improvements a year.

Those home improvement investments, in turn, usually help pump up the value of the homes even further.

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PeakTrader said...

The true change in the CPI may not be achieved. However, improving the estimate for a more accurate estimate can be achieved.

Can the change in the standard of living for the median American between one year and another be measured? Maybe not. Yet, that change exists.