Welcome To Debt Serfdom: 'Real World' Costs Triple Since 2001

Authored by Charles Hugh Smith via OfTwoMinds blog,

Welcome to debt-serfdom, the only possible output of the soaring cost of living.

Long-time readers may recall the Burrito Index, my real-world measure of inflation. The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016). The Burrito Index tracks the cost of a regular burrito since 2001. Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the cost of a regular burrito at our favorite taco truck with great accuracy: the cost of a regular burrito has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

It's time for an update: the cost of a regular burrito has now reached $7.50, triple the 2001 cost. That's a 200% increase in 17 years. According to the federal government, inflation since 2001 has risen about 40%: what $1 bought in 2001 now costs $1.43, according to the BLS Inflation calculator.

The Burrito Index is five times the official inflation rate. As I noted in The Disaster of Inflation--For the Bottom 95% (October 28, 2016) and Inflation Isn't Evenly Distributed: The Protected Are Fine, the Unprotected Are Impoverished Debt-Serfs (May 25, 2017), the gross under-reporting of inflation (i.e. the loss of purchasing power of "money" and labor) is only part of the distortion: some of the populace is protected by subsidies from the real ravages of inflation, while those exposed to the unsubsidized real-world costs are being savaged by supposedly benign inflation.

Lest you reckon only burritos have tripled in cost since 2001--have you checked out college tuition or rents lately? Consider a typical public university:

University of California at Davis:

2004 in-state tuition $5,684

2018 in state tuition $14,463

So tuition at a state university soared 2.5 times while official inflation rose by a mere 35% since 2004. If UCD tuition had only risen by 35%, it would total $7,673, not $14,463. The cost above and beyond what we would expect had tuition tracked official inflation adds up to $27,000 per four-year bachelor’s degree per student. Now multiply that by millions of college students, and you get a sense of the enormity of the gulf between real-world inflation and the official inflation rate of 2.5% annually.

In regions with hot job markets, rents have doubled since 2001. As for the unsubsidized costs of healthcare insurance: many of those paying the unsubsidized costs would be happy if their premiums had only doubled since 2001:

Why Your Health Insurer Doesn’t Care About Your Big Bills (via Maoxian)

But the cost of health care is a growing burden for MCS and its 170 employees. A decade ago, Master said, an MCS family policy cost $1,000 a month with no deductible. Now it’s more than $2,000 a month with a $6,000 deductible. MCS covers 75 percent of the premium and the entire deductible. Those rising costs eat into every employee’s take-home pay.

And here's how the bottom 95% of American households pay for soaring tuition/fees: with borrowed money:

Welcome to debt-serfdom, the only possible output of the soaring cost of living for the unprotected who are ruled by a hubris-soaked, Protected Elite. Our job is to shoulder the higher prices by taking on more debt--debt which is immensely profitable for the Protected Elite.

Here's what you're supposed to swallow: big-ticket expenses such as rent, healthcare and higher education cost tens of thousands of dollars more, but TVs cost a few bucks less, and as a result, official inflation is 2.1% annually.

As long as we accept this travesty of a mockery of a sham, we deserve what we get.

*  *  *

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.


Radical Marijuana Justin Case Thu, 05/31/2018 - 14:27 Permalink

That is an old-fashioned canard which is nostalgic nonsense, given that the source of the public money is private banks:


The Biggest Scam In The History Of Mankind

Blaming "socialism" is as stupid as blaming "capitalism," given that neither actually exist, nor could exist, as long as the public money supplies are created out of nothing as debts. NONE  of the standard terms and labels used in most public discussions of political economy have anything in common with either their dictionary definitions, nor the actual social facts.

There is only one political system, namely, organized crime (and that is the only political system which can actually exist.) At the present time, and for the foreseeable future, it is politically impossible do present relatively rational public debates regarding political economy in any publicly significant ways, since doing so requires recognizing that governments are the biggest forms of organized crime, dominated by the best organized gangsters, which are currently the international banksters.

"Free market capitalism"  is bullshit as long as the public "money" is created out of nothing, and therefore is "negative capital" which annihilated "capitalism."  Similarly, those who publicly label themselves as "socialists" tend to be less competent professional hypocrites, which operate their systems in even more dysfunctional ways.

In reply to by Justin Case

DosZap kellys_eye Thu, 05/31/2018 - 13:06 Permalink

Same here, WHAT used to be 16oz pkg now 12oz, and price 25-30% higher.

All meat/seafood/pork,whatever it is, is through the roof,even in Walmart,WHY it's that way I cant follow.(used to be seasonal fluctuations based of these factors, NOW everything is JUST one way......................UP!.)

And, they claim NO INFLATION...........

WE had like 3 yrs of drought, and farmers and livestock sellers had to get rid of the bulk of their herds,grains got so expensive they had no choice.
NOW, we have had 3yrs of great rains, crops,harvests etc,etc,prices and quantities same smaller sizes and PRICE through the roof.

Even Dollar General (the used to be cheap stuff chain?,is now $ for $ with Tom Thumb and Kroger!)

In reply to by kellys_eye

Hope Copy NoDebt Thu, 05/31/2018 - 12:01 Permalink

....and people cooking less.. a supply and demand equation.

The average 'wetback' was the prevailing consumer and there was white manual labor still in the market..  Now manual labor is only 'wetbacks' and they get paid more and are getting fatter..  and the whites lard asses are still getting burritos of the same truck, stoned, and lard-assed..


In reply to by NoDebt

el buitre skbull44 Thu, 05/31/2018 - 11:47 Permalink

Hedonics fake?  I don't think Smith took into his analysis the massive improvement of the standard burrito brought on by advances in technology.

But what Smith also didn't bring up is:

a)  How these phony CPI numbers affect the calculation of the GDP.  The GDP numbers which make the headlines is the nominal GDP minus the deflator, i.e. inflation.  This is suppose to make the number "real" growth (or the lack of it).  Since inflation has been growing (compounding) from 2010 at about 7% each year,  and the gooberment states that inflation has been under 2%, that means any third grader can calculated that the GDP has been overstated by at least 5%.  So we could be talking an average of -3% for the last 8 years, compounding downward, year by year..  The Greater Depression.

b)  Since the cost of living increases on Social Security are calculated with these phony inflation numbers, that means that geezers like me are getting fucked each year.

In reply to by skbull44

Radical Marijuana Cautiously Pes… Thu, 05/31/2018 - 14:15 Permalink

How did the strip-mining of the natural resources of a fresh planet go?

"Money" made out of nothing as debts to "pay" for strip-mining the natural resources of the planet at about an exponentially increasing rate SLOWLY transitions through levels of diminishing returns, then relatively SUDDENLY can reach tipping points where those fundamentally fraudulent financial accounting systems go through series of crazy collapses into chaos, associated with collective psychotic breakdowns.

Those established systems based on the public powers of governments enforcing frauds by private banks, and the big corporations that have grown up around those banks, are actually achieving social robberies, in ways which tend to be as deliberately ignored and misunderstood as possible.

"Money" created out of nothing as debts is NEGATIVE CAPITAL, but yet, continues to be publicly presented as if that "money" were still somehow genuine capital, which had been accumulated and saved. The deeply entrenched sociopolitical systems based upon excessively successful ENFORCED FRAUDS dominate the ways that almost everyone automatically "thinks," and therefore, communicates about "economics." It is barely possible to exaggerate the degree to which the enforced frauds achieving symbolic robberies have been able to dominate sociopolitical systems more and more for thousands of years, in ways which presented everything in the most absurdly backward ways humanly possible.

Hemingway's succinct summary of the processes toward bankruptcy as being SLOW at first, but then become much more SUDDEN, are likely to apply to the ways that Globalized Neolithic Civilization is going to run into the limits to exponential growth, through diminishing returns gradually becoming more significant, and then quickly becoming overwhelming to those sociopolitical systems which were set up to do nothing but grow & GROW!

Since the dominate sociopolitical systems are based on being able to back up legalized lies with legalized violence, through those ways that public governments enforce frauds by private banks, almost everything that Civilization does is based upon those ENFORCED FRAUDS, which includes the corollaries that while those are becoming about exponentially more fraudulent, those phenomena continue to be publicly presented as if those were NOT fraudulent.

Issues related to relative inflation & deflation are based upon the relative fluctuations of the "money" supplies being created out of nothing as debts, which "money" disappears when those debts disappear. Therefore, the basis of those phenomena are the underlying fluctuations in those ENFORCED FRAUDS.

The overall trends have been the about exponential increase in those kinds of "money" supplies. In turn, that has ultimately been expressed through the about exponentially increasing strip-mining of the natural resources of a fresh planet (which is no longer as fresh as it once was.)

Since the currently established political economy is almost totally based on being able to continue to enforce frauds, despite that structure requiring exponentially increasing fraudulence, due to the inherent structure of those systems, people who have adapted to living inside those debt slavery systems for generation after generation have developed ways to deliberately ignore the principle of the conservation of energy, as well as to misunderstand the concept of entropy in the most absurdly backward ways which were humanly possible.

Those are the underlying physical and mental contexts to the ways in which "we" are "Welcome To Debt Serfdom: 'Real World' Costs Triple Since 2001."  There are intensifying paradoxes related to almost everything that Civilization does actually becoming based on being able to ENFORCE FRAUDS, while the corollaries to those developments were the ways in which the public discussions of political economy based upon those ENFORCED FRAUDS were the almost total triumph of the banksters' BULLSHIT regarding that political economy, which lied by omission, as much as possible, regarding the actual sources of the public "money" supplies.

Meanwhile, on Zero Hedge, most articles tend to indulge in presenting their favourite versions of the impossible ideals regarding "what money should be,"  while NOT admitting and addressing what money actually is!

Furthermore, those almost total triumphs based on achieving symbolic robberies through enforced frauds have been shot through and through every facet of the sociopolitical systems which operate inside that context. Some of the crucial ways that manifests are that there are no genuine opposition groups, but rather, the only public significant groups are various layers of controlled "opposition,"  which have developed around the central core of the excessively triumphant organized crime, namely, the ways that the governments enforce frauds by private banks.

Charles Hugh Smith is one example of that kind of controlled "opposition"  to the established systems, due to the ways that his "thinking" mostly continues to use the dualities of false fundamental dichotomies, and related impossible ideals, rather than starts to use the unitary mechanisms, which should be used to better understand human beings and Globalized Neolithic Civilization as manifestations of general energy systems, totally integrated into the surrounding natural energy systems, which are innately infinitely bigger than the human systems.

It is barely possible to exaggerate the degree to which the established monetary systems deliberately ignore and misunderstand the laws of nature, because those systems are actually based upon enforcing frauds, whose social successfulness depends upon not admitting and addressing that those are not only fundamentally fraudulent, but also, necessarily, becoming about exponentially more fraudulent.

Authors like Charles Hugh Smith often provide superficially correct analyses, which are worthwhile to consider. However, they usually do NOT go through enough intellectual scientific revolutions and profound paradigm shifts. The tragic trajectory of Civilization operating debt slavery systems in ways which are generating numbers which become runaway debt insanities, which threaten bankruptcies which are SLOW, then SUDDEN, is actually many orders of magnitude worse than those who only focus upon the superficial facets of the symbolic robberies, without considering the deeper environmental issues.

Although the laws of nature are not going to stop working, there are nevertheless intensifying paradoxes due to the ways that natural selection pressures have driven the development of artificial selection systems to become as dishonest as humanly possible, and which automatically endeavour to continue to become about exponentially more dishonest, as about exponentially more "money" is created out of nothing as debts, in order to "pay" for strip-mining the planet.

While it is surely the case that endless exponential growth is absolutely impossible, the realities which matter are not merely those sociopolitical phenomena which threaten bankruptcies as the debt slavery systems drive runaway debt insanities towards some breaking points, but rather, the underlying realities are that "money" was actually being used to "pay" to strip-mine natural resources, in the most unsustainable ways possible.

The resulting issues of diminishing returns show up first and foremost as various stresses and strains in the fundamentally fraudulent financial accounting systems. However, when those phenomena go through their SLOW phases into their SUDDEN phases, the underlying issues will accompany that, as series of collective psychotic breakdowns, due to almost everyone, for generation after generation, having adapted to living inside debt slavery systems, by developing attitudes which deliberately ignored and misunderstood the laws of nature as much as humanly possible.

Although nothing depending upon the laws of nature is going to stop working, that includes the ways that the collective crazy corruption of Civilization is not going to stop, when those systems go through series of psychotic breakdowns, which are associated with the series of collapses into chaos, as the sociopolitical systems which depended upon exponential growth are no longer actually possible to continue.

Hemingway provided a succinct summary of how bankruptcy may happen to any individual. However, the same overall processes may also apply to the ways in which an entire Civilization may suffer collective bankruptcy. Globalized Neolithic Civilization, as social slavery systems, which became increasingly integrated and sophisticated debt slavery systems, within which almost everyone had to adapt to living, for generation after generation, have required that almost everyone being NOT able and willing to genuinely "think" about their actual circumstances. Instead, virtually all public communication about those circumstances is done inside the overall context of  the ways that all of those phenomena are publicly discussed by professional hypocrites, who deliberately do not understand, because they do not want to understand, and that includes those in the layers of the controlled "opposition"  groups just as much as it does those closer to the central core of those sociopolitical systems based on being able to continue to enforce frauds.

Within the foreseeable future, "we" are going to witness Civilization changing gears from SLOW bankruptcy to SUDDEN bankruptcy.

In reply to by Cautiously Pes…

tion Radical Marijuana Thu, 05/31/2018 - 16:13 Permalink

I do not think you are being fair by referring to this author as controlled opposition. Everyone is walking their own path at their own pace, often blindly stumbling about without any strong leadership, the boundaries of their cognition boxed in by a system meant to chain them are broken down one brick at a time. We all have a hard time seeing what we don’t see. Please do consider writing an article about solutions instead of problems to share so we may learn. And please consider planting moar fruit and nut trees this year ^^

In reply to by Radical Marijuana

Radical Marijuana tion Thu, 05/31/2018 - 19:32 Permalink

After several decades of working on the problem of the funding of the political processes, during which time I discussed these issues face to face with tens of thousands of people from all walks of life, as well engaged in a couple long court cases against the Canadian government regarding the laws that control the funding of registered political parties, I have been forced to conclude that nothing is going to arrest the "Debt Serfdom"  from continuing to automatically get worse, faster.

Sure, it is facile to come up with some list of impossible ideals regarding "solutions" which one may wish would be implemented. However, none of those have any practically possible ways to cope with the vicious feedback spirals of the funding of the political process having already made the entrenched "Debt Serfdom."


Here is a link to a current collection of:

Excellent Videos on Money Systems.

Those are full of theoretically possible "solutions," all of which are actually bogus bullshit, since none of them have a hope in hell of ever actually being implemented.

In reply to by tion

LawsofPhysics Thu, 05/31/2018 - 10:44 Permalink

Yep. I guess we should have let all those motherfuckers in banking and finance FAIL after all!!!

Just think of how affordable things would be now...

We will return to a monetary and economic system that is connected to the reality of the universe we live in eventually.

It is simply a matter of how we want that transition to occur.  The laws of physics and Nature will force that transition regardless. Why are a select few in banking and finance allowed access to trillions without having to perform any real work or face real risk like the rest of the population?!?!?

Not a sustainable model fuckers and someday the producers of the world will simply say "fuck it" and producer for their own needs.

In the meantime...

"Full Faith and Credit"

same as it ever was!!!

Imagery LawsofPhysics Thu, 05/31/2018 - 10:54 Permalink

the Swedes are once again gonna show the way - atleast hopefully.  On June 10, 2018, the Vollgeld Initiative will be voted on.  Oversimplifying, it's akin to making only the SNB able to print money from thin-air nothingness.  Certainly not Glass-Stegall but alteast teh Private REAL ECONOMY will have a chance now and should we adopt it here in UFSA, atleast the UFSA TBTF WS IPOd Public Corps would not be able to get infinite supplies of ZIRP Taxpayer monies which makes the Real Economy unable to compete on any level nor any industry. 

In reply to by LawsofPhysics

Imagery LawsofPhysics Thu, 05/31/2018 - 11:27 Permalink

I cautioned it was NOT Glass-Stegall but better than what exists today.  Much Better by any measure.  I think expecting Glass-Stegall in our lifetimes is wishful thinking and not likely to happen.  I expect it prolly has much to do with the literal amount of outstanding, unbacked and totally unpayable debt as well as teh stranglehold Fiat Fraudnance has on Sovereign Nations. It comes to no ones' surprise this is exactly where the Western Nations find themselves as many cautioned as they were embarking upon this decades long experiement in Fiat Fraudnance.

But it is what it is and now tehy have the choice of trying to come up with something better or letting come what may and the PTB will always choose the former.

In reply to by LawsofPhysics