>The administration plans to unveil a new type of government savings bond >today, with a return that will rise and fall with inflation to protect >investors' gains as well as to help finance the Federal debt.... They >will be promoted as an attractive means for middle-income people to >prepare for retirement or a child's education.... In January 1997, the >Treasury Department introduced its first inflation-indexed bonds, which >were generally intended for large institutional investors.... >Investors' earnings from the new bonds will be determined by two rates. >One rate, set by the Treasury Department, will remain the same for the >life of the bond. The second, a rate of inflation, will be determined >every six months by BLS to reflect changes in a version of the CPI, >according to the New York Times article.... (New York Times, page A19; >Wall Street Journal, page C28). doesn't this give the government an incentive to revise the CPI to downplay inflation? Not that I think that incentives work so simply for the gov't, it sure would be a temptation. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
