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Monday, May 30, 2011

Inflation 2011: Honey – They Shrunk Our Paychecks

Inflation 2011: Honey – They Shrunk Our Paychecks: "The Economic Collapse

Do you ever have the feeling that there are holes in your pockets? These days our money seems to slip through our hands faster than ever.

The Federal Reserve keeps telling us that the rate of inflation in 2011 is "close to zero", and this is causing confusion for many Americans because they are making just as much money as they did in previous years but it doesn't seem to go nearly as far. So what in the world is going on out there?

Well, sadly, the truth is that we really don't even know what the government considers "inflation" to be anymore. The way that the U.S. government calculates inflation has changed an astounding 24 times since 1978.

You see, it is always politically beneficial to have a low inflation rate, so recent administrations have been changing the formula constantly in an attempt to look good. But these days most Americans know something is up. All they have to do is stop at a gas station, go shopping for food or open up their bills. The reality is that inflation in 2011 is about as bad as we saw back in the 1970s, it is just that the government is much less honest about it now.

Many years ago Kenny Rogers released a song that contained the following lyrics....

You got to know when to hold em, know when to fold em
Know when to walk away and know when to run
You never count your money when you’re sitting at the table
There’ll be time for counting when the dealer’s done

Well, the U.S. middle class has been dealt a losing hand, but in the game of life you just can't fold.

Over the past 3 decades, the average household income for the bottom 80 percent of Americans has been remarkably flat. In fact, over the past several years we have actually seen median household income decline several times. If you do not know about how the U.S. middle class is being ripped to shreds, just read this article. Without a doubt, America is getting poorer.

Well, not the top 1 percent, but the vast majority of the rest of us sure are.

Meanwhile, prices have started to rise with a vengeance.

According to an article in the Daily Mail, a Memorial Day cookout will cost you 29 percent more this year than it did last year.

That doesn't sound good.

Will it be 29 percent more expensive again next year?

Perhaps some of us will just have to stop having Memorial Day cookouts because we can't afford them anymore.

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