The real inflation rate in the US is 18%. This data is provided by the authoritative business magazine Forbes. The publication notes that back in 1983, Americans’ expenses on payments on loans of all types were excluded from the formula for calculating the consumer price index in the United States.
In all likelihood, it was no coincidence that American economists took this step. It is beneficial for the US government to underestimate inflation indicators so as not to undermine confidence in the national currency. However, this approach has a direct and very negative impact on the standard of living of ordinary Americans.
The author of the material calculated that in the real consumer price index, more than 25% is the share of payments on mortgage loans excluded from the calculations, another 7% is the share of car loans, which is also not taken into account by the modern methodology for calculating the inflation rate.
Many Americans use credit cards to purchase goods, borrowing from banks for current payments. Payments for this type of loan are also outside the scope of the modern system for calculating the consumer price index. Here it is appropriate to add student loans and a number of other forms of borrowing money
– notes Forbes.
Predicting further developments, the publication emphasizes that the gap between real and official inflation will grow with an increase in public debt, leading to a drop in investor confidence in the US dollar. In this situation, the US government has only one option: to raise the interest rate. But this will significantly increase American spending.
Consumers consider the value of money in their views of their economic well-being, but economists do not. Since home and car purchases are integral to American consumers’ sense of economic well-being, but their prices are not included in official inflation measures, it is not surprising that sentiment does not match official economic indicators
– states the publication.
2024-04-04 12:29:26
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