Re: CPI Composition
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well part of cpi assumes that people will lower their standard of living when facing rising prices
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can you cite where you got this from? i must have misse dit
assuming that is correct:
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so it seems to me that if you are on a fixed income tied to cpi, then you are assured a lower and lower standard of living, assuming generally rising prices (which they've been for the last what, 70 years at least).
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i dont think i agree iwth that on the face of it unless i've missed something, which is entirely possible. if you have a fixed income based on CPI, then the relative contribution of any individual item in CPI is inconsequential so long as what you say is correct.
if the income is tied to cpi (like bieng long an inflation linked bond), then your purchasing power will not change. you may have to adjust your consumption in reality (i.e. buy chicken instead of beef), but your overall consumption (absent utility) will not change.
you are not forced into a lower standard of living. you are forced into a totally stagnant living given your statements, assuming they are factual.
Barron
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