The Fleckmeister writes: …the Bureau of Economic Analysis (BEA), whose job it is to compute the Gross Domestic Product each quarter, has “stopped reporting the real computer hardware shipment figure used to calculate real GDP growth, though it is still used in GDP calculations.” The BEA, which is part of the Commerce Department, made this readjustment because it is “concerned the rapid price declines for computers made the figures misleading.” Let’s stop and review the bidding for a second. Remember: GDP is the measure of goods and services produced in this country. The government decided that certain of its data series involved in calculating GDP were misleading. So, what did it do? Simply stop breaking them out. Makes sense to me; how about you?
Better yet, the government has decided to begin applying hedonic calculations to health care costs as well. So, you see, health care isn’t actually more expensive even if it costs you more to go to the doctor’s office than it does to rent an apartment, because the care is better. Doesn’t that make you feel good? Maybe you aren’t going anymore because you can’t afford it now, but if you did have enough money to pay for it, it would actually be cheaper because the quality is higher.
Hedonic calculations may sound superficially logical, but they are nothing more than a smokescreen designed to hide inflation.