THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Tuesday, January 7, 1997 TAG: 9701070006
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Letter
LENGTH: 27 lines
Federal Reserve Chairman Alan Greenspan said the Consumer Price Index overstates inflation. Now his statement is being repeated by various federal commissions and panels as gospel, with no factual support. I am concerned that this trial balloon to reduce the CPI will become reality.
I am wary when members of Congress brand a complex CPI formula developed by the brightest minds in the world a statistical anomaly. The CPI formula may in reality understate inflation when considering all the price, fee and tax increases by vendors and local governments postulating on inflation. Congress may be looking for a miracle to reduce deficits, but reducing the CPI is not morally or politically proper.
We are not that desperate for funds that we must pick on the CPI formula to reduce the cost-of-living adjustment (COLA) on earned entitlements. The first priority is to eliminate the raids on our treasury, e.g., pork, waste, rip-offs, fraud, giveaways, excessive tax breaks, trade imbalances, proposed tax breaks, etc. Then money should be available for earned entitlements and the deficit.
As a retiree, I depend on COLAs to maintain parity against economic growth.
DONALD A. MURRI
Virginia Beach, Dec. 27, 1996