The government ties its increases in salaries and entitlement programs to the CPI. In an effort to reduce how much money is spent, they consistently manipulate the number lower. At the same time that they’re trying to reduce spending on these programs, the private sector is also tying increases in wages to this number. But this number in no way accurately reflects what the real costs of living are. 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.