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« Reviewing the Media Pundits: Two Views of the Fed | Main | Economics IQ Answers »

May 19, 2008




How could you increase CPI to 12% without increasing the core? Have the government pay top dollar to stockpile large amounts of grain and oil?



The government needs to get more creative in getting more money into the pocket. What the government should do is to inflate the CPI measure, to say 12%. The Fed will look at core and say inflation is not a problem. Employers will be forced to track this however in cost-of-living adjustments. Within two years, the housing market will have stabilized and the consumer will come roaring back.

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