The Consumer Price Index (CPI) is what most salaries, pensions, Social Security payments and other transfer payment increases are tied to. For a couple hundred years, it accurately measured the yearly cost of living increase. However in 1983, Washington started manipulating the calculation lower in order to reduce the increase the Unites States government was required to distribute ever year. The negative unattended consequences of this have been devastating to the United States world economy. Recognizing this and understanding the negative ripple effect caused by blindly following the manipulated CPI number, we put this index together to help bring clarity and understanding to a problem that is the number one reason why people are losing real purchasing power.
As we embarked on this, we had no idea that our conclusion would be that the manipulation by the government on the CPI is the single greatest reason why people are becoming increasingly reliant on government entitlement programs.
What distinguishes the Chapwood Index from the CPI is very simple but very important. The Chapwood Index was built by simply surveying average Americans for the top items they spend their after-tax money on. We had hundreds of people send us a list of what they purchased or used throughout the course of their normal lives. We then took the top 500 that occurred most frequently and tracked the price appreciation or depreciation semi-annually.