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Labor Market Policy Research Reports, December 8 – 14, 2012CEPR and / December 14, 2012
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Serious People Could be Seriously Embarrassed: Why It's Important that We Not Go Off the "Fiscal Cliff"Dean Baker / December 14, 2012
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Social Security Does Not Contribute to the Deficit: Lessons for the Washington PostDean Baker / December 14, 2012
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Latin America and the Caribbean
Monroe Doctrine 2012: U.S. Congress Wants Iran to Stay Out of "Our Little Region Over Here”Dan Beeton / December 13, 2012
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Real Poverty Really Did Rise During Recent RecessionShawn Fremstad / December 13, 2012
report informe
The Chained CPI: A Painful Cut in Social Security Benefits and a Stealth Tax HikeAlan Barber and / December 13, 2012
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Washington Post Misrepresents Economic Projections to Push Its AgendaDean Baker / December 13, 2012
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Latin America and the Caribbean
Washington Post Predicts Disaster for Venezuela, So What if They Turn Out Wrong for the 19th Time?Mark Weisbrot / December 12, 2012
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Will New Cholera Initiative Treat the Epidemic as an Emergency?CEPR / December 12, 2012
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The Bowles and Simpson Traveling CircusDean Baker
The Exchange (Yahoo! Finance), December 12, 2012
Dean Baker / December 12, 2012
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Letter to Rep. Rooney on Social Security, Medicare Reform CommentDean Baker / December 12, 2012
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More Pressure Necessary to Get Desperately Needed Clean Water to HaitiMark Weisbrot / December 12, 2012
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Brooks Jackson Uses Annenberg FactCheck to Push for Cuts to Social SecurityThe Very Serious People have taken off the gloves. There are no rules when it comes to the battle over Social Security and Medicare as Brooks Jackson shows in his "FactCheck" on the use of the chained CPI to index the Social Security cost-of-living adjustments (COLA).
Jackson strongly endorses the use of the chained CPI, describing it in the first sentence as "a more accurate cost-of-living adjustment." The chained CPI would have the effect of reducing the annual COLA by approximately 0.3 percentage points. This reduction would be cumulative (e.g. 3 percent after 10 years, 6 percent after 20 years), leading to an average cut in lifetime benefits of approximately 3 percent for the typical beneficiary.
To push his case, Jackson seriously misrepresents the evidence. There is reason to believe that a chained index provides a better measure of inflation, since it takes account of the substitution between goods. However, the Bureau of Labor Statistics (BLS) has been producing an experimental elderly index (CPI-E) for almost three decades, which has generally shown a somewhat more rapid rate of inflation than the standard CPI currently being used to index Social Security benefits. The CPI-E would imply that the current COLA has been underadjusting for inflation, not overadjusting.
Jackson notes the CPI-E, but dismisses it as:
"an unpublished, 'experimental' index"
He then cites BLS's warning that:
"'any conclusions drawn from it should be used with caution.' BLS also concedes that the CPI-E has a number of shortcomings because it simply re-weights the price data collected for its regular price surveys, without attempting to collect some important data specific to seniors."
Given that this experimental index has shown evidence that the elderly see a higher rate of inflation than the population as a whole, it would seem that anyone concerned about having an accurate measure of the rate of inflation experienced by the elderly would want to see the BLS construct a full CPI-E. In fact, several hundred economists recently signed a statement calling on BLS to construct such an index. This would be the obvious route to go for anyone interested in an accurate index for the inflation adjustment of more than $10 trillion in Social Security benefits over the next decade.
Dean Baker / December 12, 2012
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Profit Share Hits Record High, as Politicians are Distracted by Deficit DisputeDean Baker
Al Jazeera English, December 11, 2012
Dean Baker / December 11, 2012
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Capital Gains on Homes Are Tax Exempt (see correction)Dean Baker / December 11, 2012
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On Human Rights Day, Forced Evictions Underscore How Hundreds of Thousands in Haiti Are Denied Their Right to Decent HousingCEPR / December 10, 2012
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La histeria del abismo fiscal, manipulada por los interesados halcones del déficitDean Baker
The Guardian Unlimited, 16 de noviembre, 2012
En Inglés
Dean Baker / December 10, 2012