The article in Slate titled CPI Unchained by Matthew Yglesias must be read and comprehended by every American that may possibly one day receive Social Security. While the politicians are claiming that the battle over the fiscal cliff will not involve Social Security, every American citizen will need to remain vigilant.
It is easy to manipulate a program as big as Social Security in forms that are not immediately evident. In his piece Mr. Yglesias details some shenanigans that both Republican and Democratic politicians seem to support. Specifically it involves indexing Social Security to inflation differently.
Mr. Yglesias explains it this way.
The way the index works is that the Bureau of Labor Statistics sends its minions out through the country to find out what things cost. They write this down, and the bureau notes the change over time. Then it weights the change in the price of different things according to how large a share they are in the typical consumer’s overall basket of purchases. An increase in the price of cars is a bigger deal than an increase in the price of violins because the average American spends much more on cars than on violins. The bureau also adds in some fancy math and a bit of hand-waving to try to account for changes in the quality of goods and the arrival of whole new products. The idea is to track the prices of a constant basket of goods over time.