My real cost of living is increasing by more than 3-5% per year and has been for the past several years.

The real cost of living includes things like energy and food, health insurance premiums and copays – perscription medications – etc – the inflation statistics put out by our government are very creative to say the least.

I like the ‘substitution effect’ which assumes that your grandmother will stop eating hamburger when it gets too expensive – she will substitute dog food for hamburger so her cost of living won’t change.

Another neat trick is to say that computers and cars are costing less and less each year because the technology keeps improving – I guess eventually they’ll be free?