Josh Barro, Columnist

The Mythology of Chained CPI

December 27, 2012 at 8:39 PM UTC

Josh Barro is the lead writer for the Ticker, Bloomberg View's blog on economics, finance and politics. His primary areas of interest include tax and fiscal policy, state and local government, and planning and land use. Previously, Barro was a Senior Fellow at the Manhattan Institute for Policy Research and a commercial real estate banker at Wells Fargo. He holds a bachelor's degree in psychology from Harvard and lives in Queens, New York.

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

On Christmas, Ruth Marcus wrote an opinion piece for the Washington Post saying we should link Social Security benefits to the chained consumer price index. The piece's headline says this move, which would cause benefits to grow more slowly, is "a cost savings everyone should endorse."

Marcus explains, convincingly, why regular CPI overstates inflation and chained CPI is a more accurate measure. Then she offers this head-scratcher: