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April 20, 2014

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Letter to the editor:

Are we going to settle for less?

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If you think you don’t care for inflation, pity the poor Federal Reserve. The Fed has been carrying the load of supporting what growth we have had since the unpleasantness of 2008. New York Times columnist and spokesman for the economic status quo, Dr. Paul Krugman, assures us with each column that money printing is fine, debt is fine and there is no inflation.

To combat the specter of inflation, the government has continually tuned the Consumer Price Index to lower the measured inflation because if inflation were shown to be increasing, the Fed would be pressured to combat it with higher interest rates. As it well knows, raising interest rates would cool the already stagnant economy and put pressure on the politicians.

So, to make it look like the politicians are trying to do something about our ever-mounting debt, the concept of the Chained Consumer Price Index is being debated and met with righteous anger. The idea, as I understand it, is that rather than recognize inflation, the politicians propose that those of us in our golden years can simply downgrade our lifestyles a bit to compensate. In other words, no more name-brand food; the old can do just fine with store-brand food.

Here are my questions: Have you ever tried to buy your cat cheaper food to save a buck? Are we going to put up with what our cats won’t?

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  1. There are only two things that can force our elected officials off the course they have us on.

    1) As our economy continues on this 'slow' growth path and more and more Americans fall out of the middle class, we reach a tipping point where a majority are moved out of their lethargy and demand real action.

    2) The economy reaches a point where the FED cannot control inflation with lower interest rates. This will cause a devaluation of the currency to an extent that will wake up enough Americans to demand real action.

    Until real action is taken to raise taxes greatly on the majority of Americans, or government spending is severely cut in many areas or we get a combination of both, we will remain on a path to financial disaster.

    Mr. Dorlas can complain about chained CPI because he feels it is unfair to seniors if he wishes, but the truth is that the change will amount to a drop in the bucket when compared to what actually 'must' be done on the revenue and spending sides of the national financial ledger.

    Michael

  2. The U.S. has slow to negative growth already and a dollar that has been devalued. Probably about 10 percent since the Federal Reserve started and continues QE 1, 2, 3, 4 and onto infinity. What's veiled the pain is that other countries are worse making the U.S. dollar the king of the world currencies. And the U.S. stock markets, the last vestige of the economy's hope, is going great guns. But economic history tells us that the party doesn't last forever. As soon as the party goers, aka "investors," panic and head for the exits, watch out. Make sure you're in the line.

    Carmine D

  3. Obama calls this shared sacrifice so deal with it.

  4. As a "party goer" as CarmineD coins, being both middle class and an investor (retirement funds), I feel like I am shouldering more of the "shared sacrifice" than the elite, uber-wealthy 1%. THEY need to feel the pain MORE than what they are now experiencing. Why the government continues to protect this class from responsibility is beyond me. GEZ!

    Blessings and Peace,
    Star

  5. Star,

    Many Americans feel that the wealthy don't pay enough taxes. Some Americans disagree. Regardless of what side you happen to fall on, all Americans need to understand that taxing the wealthy more won't come close to averting the financial disaster we are heading for.

    Think about it. Do you really believe that if the Federal government raised the taxes on the wealthy by 50 %, all that extra money and more would not be spent, much of it in very foolish ways? The same thing is true if taxes were raised 50 % on the middle class and the poor. The Federal government would simply spend it and then spend even more. The Federal government already collects trillions in taxes and yet they still spend trillions more than they collect! Whether you give the government more to spend or not, they must not be allowed to run trillion dollar deficits year after year after year.

    All Americans, those that favor taxing the rich more and those that don't, really need to have a 'come to Jesus' moment. Our government needs to be 'forced' to match spending to revenue, not all at once and in one budget, but over a reasonable period of time. Neither party, nobody in Congress and not this President or the last one has a serious plan to do any such thing.

    Those are the facts, and until a majority of Americans find that unacceptable and loudly say so, nothing that matters will change.

    Michael

  6. It's been said that all is fair with love and taxes,as long as you are on the receiving end.

  7. Isn't that what the Republicans have been whining about for years. They wanted Obama to do something about entitlement spending. Now he's doing it and they're still whining.

    Global growth is very close to worldwide recessionary levels. Is the slowest to been in decades. In order to have strong growth and a concurrent drop in unemployment you need strong worldwide consumption, strong government spending and strong export growth. They're all on the weak side.

  8. One comment about the letter writers CPI discussion. Re-waiting the CPI is not a new concept. It reflects changes in consumption patterns. A number of years ago Internet services were added to the CPI. This industry didn't even exist a few years ago.

    Chain CPI came about as a result of the deficit commission. It's a bit silly. It leaves out changes in healthcare costs for senior citizens. This makes up a huge part of the budget of elderly people and just takes needed money out of their pockets.

    It will result in an estimated $290 billion saving over the next 10 years. Given there's going to be over $40 trillion in expenditures on the part of the government taking money out of the pockets of the elderly is a travesty!

  9. I think that the use of chained CPI is yet another betrayal of the poor by the Democrats. Krugman a member of the status quo ? - Do you actually read him.

  10. Mr. Veritas.. The deficit is not a result of the rich not paying enough taxes. There are only a few million millionaires in the entire country.

    The deficit is a result of medical hyperinflation that has caused a family health insurance policy to go from $100 a month to $15,000 a year since 1980. In the next 40 years this country will generate $150 trillion in medical bills with the government getting stuck with well over half.

    Congress needs to stop fooling around and put a health care system together that's economical and accessible. That would cause all of these deficit problems to disappear in the blink of an eye.

  11. Republican strategy-cut taxes run deficits-kill the new deal.

  12. Spending is going up regardless of what politicians think about it. 10,000 baby boomers a day are retiring at a cost of $23,000 a year per Boomer. $10,000 for Medicare and about $13,000 a year for Social Security. Try to reduce spending in an environment like that. If they think they can do it I've got some beautiful oceanfront property in Pahrump that I would like to sell to any politician that wants to buy it.

  13. Since Obama took office close to 20 million baby boomers have retired. $23,000 a year times 20 million retirees equals $460 billion in increased spending just to cover the retirees. We still have another 36 million to go before baby boomer retirements are complete.

    In addition the infrastructure in many parts of the country is falling apart and it will cost trillions to get the infrastructure up to snuff. The letter writer doesn't like the fact that the Fed is printing a lot of money. He better get used to it. The printing presses are going to be running 24 hours a day seven days a week for at least the next 50 years.

  14. We've been SETTLING FOR LESS for decades now. We must TURNAROUND THE GREAT SOCIETY and steer back to individual self reliance. We need to provide a TEMPORARY safety net for CITIZENS ONLY. We need American jobs for Americans, not the 7 million illegals employed here.

  15. Cost of Medicare Part B more than doubling in one year compliments of Obamacare--so we can medicate the illegals while American seniors are cold and hungry.

  16. http://www.factcheck.org/2011/04/premium...
    Medicare Part B doubling??? Horse manure!
    Roslenda..You are the best!

  17. Teamster: The Democrats have already made us dirt poor. They just convinced you that dirt is good for you and money is not.

    Carmine D

  18. Gerry:

    Medicare has doubled in the last decade. It's doubled in just 10 years. Think about that and what it portends. That's a staggering fact. I don't care what political party you belong to.

    Carmine D

  19. Comment removed by moderator. Inappropriate

  20. Do the math, if you can. Media just lightly covered that new amnesty means $3-4 trillion more on the federal deficit. Add in state/local spending, K-12..... 15-20 million illegals AT LEAST per ICE data 2 years old. We CANNOT AFFORD it. AND we cannot afford to keep paying 24/7 cradle to grave for teen moms, drunk and drug-using dads spreading their dna without supporting their kids.

  21. MKC 7 a.m. A man with a brain!

  22. Hagman 5:30 You "use" 2011 data? Get with it to the extent you can. Medicare part B premiums go from $97 to $200 in 2014. 2011 data does not apply. Thank you Obamacare. Less for American seniors so we can medicate illegals and indigents.