Obama is proposing to change the way the Consumer Price Index (CPI) is calculated. The CPI is used to determine future increases in Social Security, other benefits, and even wages. If the cost-of-living goes up, Social Security and wages are increased with increases in the CPI to catch up with the cost-of-living.
The Hameau de la Reine The Queen’s Hamlet was a rustic retreat in the park of the Château de Versailles built for Marie Antoinette in 1783 near the Petit Trianon in the Yvelines, France. It served as a private meeting place for the Queen and her closest friends, a place of leisure. It contained a meadowland with lakes and streams, a classical Temple of Love on an island with fragrant shrubs and flowers, an octagonal belvedere, with a neighbouring grotto and cascade. There are also various buildings in a rustic or vernacular style, inspired by Norman or Flemish designed, situated around an irregular pond fed by a stream that turned the mill wheel. The building scheme included a farmhouse, (the farm was to produce milk and eggs for the queen), a dairy, a dovecote, a boudoir, a barn that was burned down during the French Revolution.
“Let them eat cake” is the traditional translation of the French phrase “Qu’ils mangent de la brioche”, supposedly spoken by Marie Antoinette upon learning that the peasants had no bread. Since cake was enriched with butter and eggs, as opposed to ordinary bread, the quote indicated the princess’s ignorance of the starving condition of her people. In the end, Marie Antoinette was beheaded during the French Revolution.
Obama’s proposed Chained CPI change assumes that as the price of steak goes up the Social Security recipient and wage earners will switch and substitute lower cost chicken (so, don’t adjust the CPI because the cost of a meal has not changed, cheaper chicken was substituted for steak). The problem is that if this substitution continues, chicken for steak, horse meat for chicken, macaroni for horse meat, in the end we will all be eating dirt while Social Security and wages haven’t increased at all.
A Chained CPI has no effect on those with enough wealth, or high enough earnings, that levels of Social Security and wages make no difference in whether they eat steak or not. But for most of us, their theory is “Let them eat dirt.”