Here is Ed Lorenzen:
Here is Ed Lorenzen on his soapbox:
Why 'chained CPI' works for Social Security
by Ed Lorenzen, LATimes.com -- April 2, 2013
[...]
In fact, experts across the ideological spectrum agree that the chained CPI is indeed more accurate. In his 2005 book "The Plot Against Social Security," Hiltzik listed various proposals for reforming Social Security, among them chained CPI. He wrote, "Many economists maintain that CPI consistently overstates inflation ... because it doesn't account for so-called substitution effects." Hiltzik doesn't explicitly endorse the proposal, but this is certainly a far cry from his objection that there are "no grounds" for the claim that chained CPI is a more accurate measure of inflation.
[...]
The government indexes benefit programs such as Social Security as well as provisions in the tax code to ensure they keep pace with inflation. Using a more accurate measure of inflation is not a benefit cut, but rather ensures that the benefits increase by the proper amount to achieve the desired policy goal. This change does not single out Social Security, as Hiltzik implies, but would apply to provisions throughout the federal budget. Social Security accounts for slightly more than one-third of the $390 billion in total savings over the next decade that would result from switching to chained CPI, with a similar amount of savings from revenue and the remainder from other government programs indexed to inflation along with interest savings.
To the extent that the overpayments under the current formula provide important help to certain low-income and elderly individuals, a switch to the chained CPI can and should be accompanied by targeted policy changes providing benefit enhancements designed to help the affected populations rather than providing higher-than-justified inflation adjustments for everyone.
[...]
Here is WHOM, Ed Lorenzen quoted as in support of Chained-CPI to cut Social Security, his fellow-journalist at the LA Times, who has a decidedly different opinion on the topic, than the one portrayed by the Peterson spokesman:
Social Security cutters distort 'accuracy' of chained CPI, again!
by Michael Hiltzik, LATimes.com -- April 2, 2013
[...]
Lorenzen even tries to enlist me in his campaign by selectively quoting from my 2005 book, "The Plot Against Social Security," in his essay, published today on The Times' website.
Lorenzen is executive director of the Moment of Truth Project and an "advisor" to the Committee for a Responsible Federal Budget. Both are associated with hedge fund billionaire Peter G. Peterson, whose hostility to Social Security is well-documented.
[...]
The chained CPI, which incorporates speculation about whether consumers facing price increases habitually stop buying more expensive items in favor of something else, just looks at consumer habits a different way. Is it more "accurate"? No one can say. All we know for sure is that it rises at a slower rate than the conventional urban CPI. That's its charm for Lorenzen and his clientele -- it will cut the cost of Social Security, though it will do so by cutting the size of cost-of-living increases for retirees.
[...]
If Lorenzen really was interested in accurately measuring inflation for Social Security, he would endorse the CPI-E, an inflation measure the Bureau of Labor Statistics has developed specifically to track expenses incurred by the average senior on Social Security. It does so by overweighting such items as healthcare and housing.
[...]
According to Michael Hiltzik,
the CPI-E is geared to the needs of seniors. If Lorenzen was really interested in helping seniors, he'd be talking about CPI-E, instead of the
Chained CPI, which is based on
the slower growing CPI-U Index,
designed for "conventional urban" consumers -- presumably those who
are actively and gainfully employed.
So what is this CPI-E index (E for Elderly), and why is next-to-no-one talking about it? Good Questions?
Most likely because billionaire Peter G. Peterson, doesn't much like it. And so has paid hundreds of millions to make sure you never do hear about it, above his grand ruckus, either ...
Economist Dean Baker wants to know why we don't hear about CPI-E index too.
Baker wants to know why do we keep sticking it to seniors -- those who can least afford to tighten their belts any further? Good Questions.
Time-mark 2:10
Dean Baker: When were talking about an accurate Cost of Living Adjustment, the Bureau of Labor Statistics actually does an "Elderly Index" -- that's supposed to monitor the actual consumption trends of the elderly. It's different from that of the population, as a whole. They consume more health care, less ah ...
Chris Hayes: This is called CPI-E ...
Dean Baker: Dash E -- that's right. And then it actually shows a higher rate of inflation. Everyone will jump on that -- that's just an experimental index. [Then I] always go, "If you're concern is accuracy, have the Bureau of Labor Statistics do a 'Full Elderly Index' -- Let's see what it shows." And they just go running. The point is they want to cut benefits; that's the point here.
Dean Baker: Again were talking about a population that does not have a lot of income for the the most part. And what I find particularly cruel about this, is that these people 'just had their ass kicked' -- they just, you know, their 401Ks are nothing; the equity they had in their homes collapsed (not because of their bad decisions). The folks in Washington could not see an $8 Trillion housing bubble. They were out to lunch. ... So were not talking about taxing Wall Street, were not talking about a Financial Transaction Tax -- were talking about Social Security. What world does that make sense in?
link to video
Here's another interesting chart from an earlier segment in the show:
The Chained CPI is projected to only Cut Spending by $210 Billion over next 10 years. Certainly there must be some more fair and humane ways to raise 21 Billion a year? Than playing games with seniors' already too-meager, cost of living increases.
Now about those Dash E numbers, the CPI-E Elderly Index, that Chris and Dean were discussing -- What is it? What factors does it weight, of special concern to seniors? Good Questions.
Last time we checked, the cost of being 'Old in America' is expensive. Inflation is a very BIG deal to them, since most of them live on very fixed incomes.
If seniors were treated with the respect, that all their years of hard work (and tax paying) deserves -- they would already be getting MORE Benefits, not less. More, like those Elderly needs being specially targeted in the CPI-E ... (NOT by the Chained CPI-U.)
Bureau of Labor Statistics
Attachment F: Experimental CPI for Americans 62 Years of Age and Older
by Kenneth J. Stewart and Joseph Pavalone
Introduction
The Consumer Price Index (CPI) of the Bureau of Labor Statistics (BLS) measures the average change in prices over time for a fixed marketbasket of goods and services for two population groups. The CPI for All Urban Consumers (CPI-U) represents the spending habits of about 80 percent of the population of the United States. The CPI for Urban Wage Earners and Clerical Workers (CPI-W) is a subset of the CPI-U population, and represents about 32 percent of the total U.S. population.
In addition to the official CPI's for the CPI-U and CPI-W populations, the CPI calculates an experimental price index for Americans 62 years of age or older [CPI-E]. The Older Americans Act of 1987 directed the BLS to develop this experimental index.
[...]
Table 2. Comparative analysis of CPI relative importance data of selected expenditure groups, December 1995.
Expenditure Group CPI-U CPI-W CPI-E
All items 100.00 100.00 100.00
Food and beverages 17.33 19.26 15.00
Food at home 9.88 11.21 9.66
Food away from home 5.89 6.37 4.23
Alcoholic beverages 1.57 1.68 1.10
Housing 41.35 38.89 46.89
Shelter 28.29 25.98 33.88
Apparel and upkeep 5.52 5.53 3.93
Transportation 16.95 19.02 13.82
Medical care 7.36 6.26 12.14
Medical care commodities 1.28 1.06 2.57
Medical care services 6.08 5.21 9.57
Health Insurance .36 .25 1.09
Entertainment 4.37 4.03 3.35
Other goods and services 7.12 7.01 4.87
College tuition 1.61 1.19 0.59
Conclusions
This report analyzed the changes in the prices of three population groups: CPI-U, CPI-W, and the CPI-E, the experimental population of Americans at least 62 years of age, for the period December 1990 through December 1995. Analysis of the relative behavior of the three indexes at the all-items level revealed that the experimental index, which rose 15.9 percent during this period, had a higher rate of increase than the indexes for CPI-U and CPI-W, which rose 14.7 and 14.1 percent, respectively.
The experimental price index, reweighted to incorporate the spending patterns of older consumers, behaved more like the CPI-U than the CPI-W. This was expected, because the CPI-U includes the expenditures of all urban consumers, including those 62 years of age and over. The CPI-W, however, is limited to the spending patterns of wage-earner and clerical families and, therefore, specifically excludes the experience of families whose primary source of income is from retirement pensions.
[...]
Don't our seniors deserve better? Don't they deserve Cost of Living Adjustments that actually focuses
on their increasing costs,
like Medical Care, Insurance, and Housing, like happens in the CPI-E? Instead of the CPI-U, which is designed to address the living costs of young urbanites?
Don't our seniors deserve better?
Better than Peterson's front-man Ed Lorenson, who wants to give them "spend-thrift savings" in their old age -- through the Peterson-funded advocacy group which he leads. A well-funded soapbox with the boots-quaking name, Moment of Truth Project:
(aka. Catfood Commission II)
Recommendations of the Fiscal Commission
MomentOfTruthProject.org
Discretionary Spending Cuts
1.1: CAP DISCRETIONARY SPENDING THROUGH 2020. Hold spending in 2012 equal to or lower than spending in 2011, and return spending to pre-crisis 2008 levels in real terms in 2013. Limit future spending growth to half the projected inflation rate through 2020. (Saves $183 billion in 2015, $1,760 billion through 2020)
1.2: CUT BOTH SECURITY AND NON-SECURITY SPENDING. Establish firewall between the two categories through 2015, and require equal percentage cuts from both sides.
1.3: ENFORCE CAPS THROUGH TWO MECHANISMS -- POINT OF ORDER AND SEQUESTRATION. Require a separate non-amendable vote in House and 60-vote point of order in Senate to waive spending beyond the caps. Impose across-the-board sequester by the amount appropriations exceed the caps.
[...]
Social Security Reform
5.1: MAKE RETIREMENT BENEFIT FORMULA MORE PROGRESSIVE. Modify the current three-bracket formula to a more progressive four-bracket formula, with changes phased in slowly. Change the current bend point factors of 90%|32%|15% to 90%|30%|10%|5% by 2050, with the new bend point added at median lifetime income.
[...]
5.4: GRADUALLY INCREASE EARLY AND FULL RETIREMENT AGES, BASED ON INCREASES IN LIFE EXPENCTANCY. After the Normal Retirement Age (NRA) reaches 67 in 2027 under current law, index both the NRA and Early Eligibility Age (EEA) to increases in life expectancy, effectively increasing the NRA to 68 by about 2050 and 69 by about 2075, and the EEA to 63 and 64 in lock step.
[...]
5.7: ADOPT IMPROVED MEASURE OF CPI. Use the chained CPI, a more accurate measure of inflation, to calculate the Cost of Living Adjustment for Social Security beneficiaries.
We all deserve better. ... Better than
Billionaire Front Groups spending a fortune ($458+ Million), to shape, define, and filter
OUR Social Agenda.