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One of my favourite examples of how the government moves the goalposts around to make the economy numbers go up is how they removed housing prices from the CPI
by brenden2 7y ago
One of my favourite examples of how the government moves the goalposts around to make the economy numbers go up is how they removed housing prices from the CPI in 1985.
Inflation is often used as a benchmark for economic health, but it completely ignores one of the biggest sources of inflation: the price of homes.
The utility of a house never increases (unless you make upgrades), so if the price goes up it's not really more valuable, assuming it rises at the same rate as nearby homes. It's not like you could sell and move into a fancier house nearby.
- wasdfff 7y agoSelling and moving to a fancier place nearby is what many people do. You free up that equity and suddenly you can afford a sizable down payment on a nicer place that you couldn’t otherwise had you been renting the whole time.
- brenden2 7y agoThis is only because most home purchases are fueled by debt.
- rmah 7y agoHousing prices are included in the CPI both for owners and renters. Here's how => https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...