Topic: Boskin Commission

The official Consumer Price Index (CPI) is criticized for systematically understating inflation since the 1996 Boskin Commission. Through "substitution bias," the government replaces high-priced items like steak with lower-priced items like hamburger in the inflation basket. If 1980s-era metrics were applied today, real inflation would be estimated at approximately 15%.

In 1996, the Boskin Commission under President Bill Clinton changed how inflation is measured to understate government payments. Dr. Kirk Elliott argues that if 1980s metrics were used today, the real inflation rate would be between 15% and 20% rather than the official 3.1%. This "artificial system" is leading to an "inflationary recession" or stagflation, where prices rise while wages and economic growth stagnate.