The Great Affordability Crisis

Inflation seems to be so much higher than the official numbers. Admitting the real inflation rate would cause problems for the government so they don’t admit it.

I made a nice salad for dinner the other night and joked with my wife that two basic dinner salads might cost $30 in a restaurant now. Then I realized that it was not really a joke, that restaurant prices have gone way up, and a friend who owns a large restaurant told be that food and other operating costs are causing problems for his business.

The real crisis will come when the real purchasing power of pensions, 401K disbursements, and social security stop being anywhere near enough for a decent life.

The article is about certain components that are rising faster than inflation. Housing and medical care are included in the CPI[1], but perhaps they should be weighted higher. (Shelter is around 30%, medical care 8%). Things like student loans don't figure into that at all: tuition costs do, but not the accumulated weight of servicing the loans. The weights are kind of an interesting read.

A lot of it is about the way it impacts people disproportionately. The inflation number lumps a lot of things into one average, but a lot of costs hit specific people and don't affect others. If you don't have child care costs or student loans, you are probably enjoying the soaring economy. But those who do are getting hammered.

[1] https://www.bls.gov/cpi/tables/relative-importance/2016.pdf

That 37% has to come from somewhere.