i respect people who disagree. please google True inflation rate vs. government claims to see where I am coming from. The Institute For Economic Research is a very well respected source for knowing the real inflation. they use all good and services that the average American family uses.
from my experience, 16 years ago our family was able to get by on a 9 hour day. the last couple years i have to work a 11 hr day for the same standard of living. have no extra debt. drive a 14 yr old car , etc etc. we are always looking for ways to cut back. I also live near Lake Tahoe so it is probably higher cost of living than most places.
But the problem lies in measuring inflation. As I mentioned earlier, despite higher sticker prices at the grocery store, overall spending has been unchanged (unadjusted) for more than ten years, despite heavier volumes -- and the % of each paycheck spent of food is at an all-time low. AIER is attempting to measure real world costs, and clearly real world workers are spending less on food (by taking advantage of promotions, discounts, and store brands while also shopping discount stores) than before. Nor does AIER compare long-term trends, which is crucial for staple products such as dairy & meat. Dairy and meat prices crashed to historic lows in the late 2000s, then began quickly recovering. Propagandists will point out the huge post-crash spike, but fail to mention that these products still cost LESS (unadjusted) than they did in the mid-2000s -- and in many cases, even the late 1990s.
And how do you measure gas prices? Gas prices have been roller coaster-like for many years, getting really "crazy" in the past five, although they've been stable for the past two. Do you use annual averages? Kinda deceptive since that doesn't measure driving trends (e.g. driving is disproportionately heaviest in the summer). And we're sitting on historic inventories of oil & refinery capacity, so it's almost inevitable that gas prices in 2013 will average less than they did in 2012, especially during the summer months.
What about electricity prices? Yes, in many areas the price of electricity has increased, and we have more devices to plug in, but due to more energy efficient light bulbs & appliances, the average consumer bill is hitting multi-year lows. (Of course, if you liberally ran your AC during the hot summers recently, this may not apply to you... hence the term "average"
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My point is that "real inflation" is a challenging concept; if rates were indeed accurate, our economy would be in a depression. What "real inflation" doesn't measure is real trends -- for example, the price of broadband Internet speeds capable of streaming video is at an all-time low, thus many consumers have replaced video rentals, cable television, etc. with their Internet. Thus, they're immune for the ongoing cable price hikes.
