What Chained CPI Means

[Geee]

National Review:

What kind of economic metric can be called “a moral and economic disaster,” “unconscionable,” and “a fraudulent premise”? A chained Consumer Price Index for all urban consumers —“chained CPI,” for short (C-CPI-U, if we’re really being austere). Applying this measure across the U.S. government’s tax and spending policies would apparently be a crime against humanity.

And yet it’s been a popular entitlement-reform proposal from conservatives for many years now, was a feature of the Simpson-Bowles and Domenici-Rivlin bipartisan deficit-reduction plans, and has now been included, with a couple of tweaks, in President Obama’s 2014 budget proposal.

What is the difference between chained CPI and the status quo? Chained CPI, most simply, is a lower estimate of inflation, and probably a more accurate measure of how much the cost of living increases each year. It can have big consequences for the federal budget.

[Geee]

Krauthammer’s Take: If We’re Stuck at Chained CPI, ‘We’re Going to End Up Like Cyprus’

 

Charles Krauthammer said on tonight’s edition of Special Report that President Obama’s proposal to adopt chained CPI is a minimal concession, one recommended by virtually every expert and commission that has studied the matter.

 

The country’s fiscal future is dire, Krauthammer argued, if the president and congressional Democrats are unwilling to give more ground to Republicans and make more substantive cuts and reforms. “If this is where we are stuck, we’re never going to achieve anything, and we’re going to end up like Cyprus,” he concluded.

 

Video at link

 

http://www.nationalreview.com/corner/345267/krauthammers-take-if-were-stuck-chained-cpi-were-going-end-cyprus-nro-staff