Inflation statistics can be significantly affected by measurement methodology changes, such as the 1990s substitution bias where consumers switching to cheaper alternatives (like hamburger instead of steak) are not counted as inflation, and the use of imputed rent (homeowners' estimates of rental value) rather than actual market rents, which together can understate the true cost of living and result in lower Social Security payments.
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Is it inflation ?Added:
The government says inflation [music] is 2.7% your grocery bill went up 26% since 2020. [music] Your rent didn't get cheaper. Your paycheck didn't keep up.
So who's lying? You or the math? Here's what they don't tell you. In the 1990s, they quietly changed how inflation is measured. Old system, if steak gets expensive, that's inflation. New system, if steak gets [music] expensive, you'll just buy hamburger. So your standard of living dropped, but officially, nothing happened. They also stopped measuring actual rent. Instead, they ask homeowners what they think their house might rent for. That guess, that single imaginary number, makes up 1/3 of the entire inflation calculation. Why change the formula? Simple. Lower inflation numbers mean lower Social Security payments. Lower payments mean billions saved. Your pain is real. The number just isn't designed to capture it. They didn't let prices rise, they changed the rule.
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