The umpteenth version of the inflation thread ("OMG the govt is diddling the inflation rate and making us all run out of money!!!") reminds me yet again how difficult it is to explain CPI to a Young Dreamer in one paragraph.
We ERs may choose (and some even have the background/inclination) to dig deeply into the most [-]trivial[/-] abstruse [-]consipiracies[/-] details of the subject, but most military veterans don't have the time or the interest and may even think that inflation involves an air pump.
Here's a sample of what I'm contending with from a submariner board:
It's difficult to respond to this level of knowledge with a sentence like "Well, when the BLS makes their hedonic adjustments to CPI-U without accounting for the PPI or the ECI"...
It seems that the best I can do to explain this to (possibly uninformed) veterans is to quote Dimson & Marsh ("3% for the last century, 5% over the last three decades"), claim that the Fed prefers low inflation, and propose that Young Dreamers invest in a high-equity portfolio while they're still DCA'ing their paychecks. A personal inflation rate can be substantially different from the official number and people can decide on their own hedonic substitutions. Military retirees can at least hope that the pension's COLA will blunt the effects of inflation. TRICARE can help with runaway healthcare expenses.
Anything else that a veteran (or their families) would find comforting about military pay and its ability to contend with inflation? Any other explanations I could attempt?
We ERs may choose (and some even have the background/inclination) to dig deeply into the most [-]trivial[/-] abstruse [-]consipiracies[/-] details of the subject, but most military veterans don't have the time or the interest and may even think that inflation involves an air pump.
Here's a sample of what I'm contending with from a submariner board:
I'm at 17..and probably 6 out from retiring.....but I've got an opinion on why you can't and shouldn't really "retire."
We have a good pension in that it adjusts for relative inflation each year(about 3% per year, right??).
However, economic experts think the real inflation level is something like 10%. So, even if they are off slightly, its still higher then our yearly adjustment....so our purchasing power decreases every single year. So, say you retire are 42...and live to 82. Somewhere along those 40 retired years, you'll definitely be living worse then you should be....unless you have other investments to balance out with.
It's difficult to respond to this level of knowledge with a sentence like "Well, when the BLS makes their hedonic adjustments to CPI-U without accounting for the PPI or the ECI"...
It seems that the best I can do to explain this to (possibly uninformed) veterans is to quote Dimson & Marsh ("3% for the last century, 5% over the last three decades"), claim that the Fed prefers low inflation, and propose that Young Dreamers invest in a high-equity portfolio while they're still DCA'ing their paychecks. A personal inflation rate can be substantially different from the official number and people can decide on their own hedonic substitutions. Military retirees can at least hope that the pension's COLA will blunt the effects of inflation. TRICARE can help with runaway healthcare expenses.
Anything else that a veteran (or their families) would find comforting about military pay and its ability to contend with inflation? Any other explanations I could attempt?