The Bureau of Labor Statistics reported on Friday that they would go back to the traditional method of calculating the Consumer Price Index as a more accurate reflection of Inflation. They admitted that the use of the substitution effect, owner equivalent rents, and hedonics has grossly understated the rate of inflation over the years and they intend to rectify this immediately. Likely, the Fed will move quickly to raise short term rates to 8% to fight off the true inflation rate.
Additionally, the Bush administration has acknowledged the impact of understating inflation and has vowed to increase Social Security payments by as much as 70% (the estimated understated inflation rate since the Carter administration).
The Fed has decided to keep publishing the broadest measure of the money supply (M3) and admitted that they didn't decide to stop publishing it to save money. What a Shocker! They had hoped to manipulate the money supply without public scrutiny, but they now admit that it wasn't such a great idea.
Congress and the Senate passed a bill on Friday that would change the current Federal Budget to a "Pay as You Go" model. They emphasized the need to balance the budget and reduce the crippling deficit that will dramatically reduce the standard of living of future generations. They will be raising taxes for the richest 1% of Americans and will plan a withdrawal from Iraq within the next 3 months. All of this will raise significant revenue and reduce expenditures to a managable level.
President Bush stated that he "can't wait to sign the bill" and is giving up his weekend in Crawford to finalize the new legislation. VP Cheney has given up his weekend hunting trip to witness the signing of this historic legislation.
It looks like the Government is finally turning things around.
Any looming economic disaster will likely be averted.
All is Well!
The Government actually cares about us!
Um.
Um.
Um.
APRIL FOOLS
