Do you feel that this government has been lying to you about the inflation rate? (Claims it is between 2-3%)

Answer 1

The most important feature of the new budget released by the Bush administration on Monday is that it is not, in any serious sense of the word, a budget at all. It is a monumental fraud, aimed at concealing fiscal reality and usurping decisions on spending that, under longstanding US constitutional procedures, are reserved to Congress rather than the executive branch.

Many of the most expensive and politically contentious initiatives of the Bush administration are simply left out of the budget. By one estimate, the omitted costs come to $4 trillion over 10 years, an amount equal to about one-and-a-half year’s spending at the current rate of $2.5 trillion a year.

There is no funding for the wars in Iraq and Afghanistan, although the costs are estimated at $5 billion a month even if the US troop presence in Iraq is reduced to 120,000 next year.

White House budget director Joshua Bolten admitted that the war would involve major costs, but added, “It wouldn’t be responsible for us to take a guess at what those costs are.” (This argument apparently does not apply to the campaign for Social Security privatization, which Bush has sought to motivate through implausible and tendentious projections about the state of the system’s finances 75 years from now).

The Bush administration has consistently refused to incorporate spending for its war policies into the regular budget, instead making use of supplemental appropriations bills rammed through Congress with demagogy about the need to “support our troops.” The purpose has been to distance the social cuts imposed by the administration from the cost of its wars, and thus conceal their essential connection: millions are being cut off food stamps, student loans or health insurance to finance American military aggression.

There is no funding for Bush’s Social Security privatization plan, although the cost of establishing new private accounts is projected at $754 billion over the first decade and trillions more thereafter. At a press conference Monday, Bolten gave the following explanation for why the Social Security costs had not been included: “The budget went to bed,” he said, “before the president’s proposals were announced.”

The argument is preposterous, since Bush had made no secret of his plans during the election campaign. Moreover, the budget includes many other White House proposals which have yet to be fleshed out, let alone submitted to Congress. Bolten denied that the White House was concealing the enormous costs of Social Security privatization. In any case, he told reporters, the White House position was that “transition financing does not represent new debt.”

The White House has also played fast and loose with its tax revenue projections. Most of the sweeping tax cuts for the rich enacted in 2001 and 2003 are scheduled to expire after 2009. The Bush administration is seeking to extend the cuts indefinitely, at a cost estimated at $1.1 trillion through 2015. (Repeal of Bush’s tax cuts would provide more than enough money to resolve the projected budget gaps in Social Security and Medicare).

In order to avoid recording the cost of these tax breaks, the Bush administration has scrapped the traditional ten-year scoring of the cost of programs and tax cuts, in favor of a five-year projection that ends in 2010—just when the huge bonanza for the rich would be renewed.

An even cruder feat of budget falsification relates to the planned restructuring of the Alternative Minimum Tax, a provision that was adopted in the 1980s to prevent the wealthiest individuals from using deductions to eliminate all tax liability. Because the AMT is not indexed for inflation, substantial sections of the middle class will fall under its provision soon—the cutoff now is barely $150,000 in year in family income.

Both Republicans and Democrats in Congress have called for revising the AMT, either by raising the level at which it takes effect or indexing it for inflation. The result would be to reduce tax revenues by $72 billion in 2009 and a total of $500 billion over the following decade. The Bush administration supports the restructuring of the AMT, but its budget assumes that the full AMT revenues will be collected, a key element in its projection that the budget deficit will be cut in half by 2009.

Similar scoring is applied to the White House proposal for still another tax cut favoring the wealthy, the retirement savings accounts and lifetime savings accounts (called by their acronyms RSA and LSA), which will allow individuals to save as much as $30,000 a year in tax-free accounts they may use for any purpose. The cost of this tax break is estimated by the Congressional Research Service at $300 billion to $500 billion over 10 years, accruing only to those Americans who have a spare $30,000 a year to invest—i.e., the wealthy and the upper layers of the middle class. The RSA and LSA would be phased in gradually, and the Bush budget, limited to a five-year horizon, significantly understates the cost.

The overall budget numbers released by the White House are equally rigged. Bush said in his State of the Union speech that the budget would cut the deficit in half by 2009, but the budget document uses last year’s projected $521 billion deficit as a starting point, rather than the actual 2004 deficit of $412 billion. As a result, the target for 2009 is to reduce the deficit to $260 billion, rather than $206 billion if the actual figure had been used. This fiscal year’s deficit is actually higher than the year before—an estimated $427 billion.

More and more, the financial numbers produced by the White House have come to resemble the cooked books of corporations like Enron or WorldCom. Huge liabilities and expenses are shifted into “off-the-books” accounts like the shell corporations created by Enron to sustain its Wall Street image of ever-rising profitability. If Bush were CEO and Bolten CFO of a Fortune 500 corporation, the budget numbers they have just submitted would be grounds for prosecution for securities fraud.

The Government Accountability Office (formerly the General Accounting Office), having somewhat higher standards than Enron’s now-defunct accountant Arthur Andersen, has refused for years to certify the accounts of the federal government. This year GAO auditors gave 21 out of 26 federal departments the lowest possible ratings in terms of their accounts, meaning that the auditors could make no determination whatsoever about the actual state of the books.

There has been considerable negative commentary on the budget in the corporate-controlled media, much of it focused on the arbitrary assumptions and concealment of large future costs. BusinessWeek magazine, in an editorial headlined, “Wanted: An Honest Budget,” summed up the case as follows: “New private retirement accounts could cost $1.5 trillion from 2011 to 2015 and add $100 billion a year to the budget deficit for 20 years. Making tax cuts permanent could cost $2 trillion. Fixing the AMT could cost an additional $500 billion. These are real numbers that should be included in any real budget. If President Bush believes the policies proposed are best for the nation, then he should lead an honest dialogue about how we should pay for them.

Answer 2

There are two main inices: RPI (retail price index) CPI (consumer price index) In 2003 the government "conveniently" chose to adopt the CPI measure as its reliable guide to underlying inflation and set a target inflation figure of 2%. They also abdicated responsibility for interest rate setting to the Bank of England Monetary Policy Committee. The problem with this is that the CPI figure excludes things such as Mortgage interest and council tax. This allowed for runaway house price inflation and council tax bills to be excluded and maintain an artificial rate of inflation at around 2%. The then chancellor (now Prime Minister) has bragged about this for years and claimed that interest rates have been kept historically low by his prudent management of the economy. Well, he was lying! Mortgage interest, fuel bills and council tax were probably the fastest rising bills for most households during a decade which saw house prices rise and public services get more expensive. Most of this went blissfully over the heads of the electorate who were just happy to boast how much their house is now worth and felt richer every day. Official treasury figures for both RPI and CPI are being increasingly contested for their credibility and there is much controversy about them being manipulated to disguise the true extent of inflation. Even if you accept that the figures are acurate but looked at the difference between the official RPI and CPI since 2003 you will see that interest rates have been manipulated and kept artificially low. Low interest rates= low mortage repayments= housing boom= a happy, ignorant mass who think they are getting richer= equity withdrawal= consumer boom= success at the ballot box. It has also been used extensively as a means to keep public sector wage rises low. All very good for the politicians in power............... Until something goes wrong and you're rumbled! Well it has gone wrong. The country is waking up to it and Gordon Brown, you've been rumbled.

Answer 3

I don't think they consider the cost of energy and healthcare in the inflation rate. It is like the unemployment figures they only count the people that are on unemployment so it makes them look good. But the proof is in the pudding.

Answer 4

I think, if the oil will be paid in the future, in euro, the inflation rate will go higher than you imagine; perhaps 50%. But unfortunately, this would influence the world economy as well.

Answer 5

No. But reliance on statistics is a risky thing. From President Truman I learned the saying: "There are lies, damned lies, and statistics." If I do not collect the data and do my own interpretation of the statistics, I am reluctant to rely on someone else's analysis and opinion.

Answer 6

If they are, then so are about 4 other independent agencies....so NO, I do not think they are

Answer 7

Depends if gas prices are figured in there or not.

Answer 8

Uhh No and I don't see any proof of the lies you are talking about!!

Answer 9

yes

Answer 10

This administration lies to us about everything!