Thursday, December 15, 2011

Inflation has been in gradual decline since 1981

Paul Krugman prepared the graph.  This is "headline CPI" inflation which includes energy and food prices, but averaged over 3 years (blue line) or 4 year (red line).  The averaging removes the short spikes which always get people scared.  You get similar smooth curves looking at "core CPI" which excludes energy and food prices, but many people say the "core" numbers are not meaningful.

The reason it is important to debunk the Inflationistas is because they are the ones screaming about government spending which would help lower unemployment.

Such people as Ron Paul screaming that hyperinflation is just around the corner, unless we cut, cut, cut government social programs.

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