NATION NEEDS ACCURATE CPI

A five-member panel of the nation's top economists has studied the Consumer Price Index and says that this barometer is flawed and inaccurately measures the rate of inflation. They claim that inflation has been overstated by approximately 1.1 percent annually in recent years. At stake are hundreds of billions of dollars, owing to the fact that so many payments are tied to this crucial gauge. Social Security payments are just one of the many huge transfers that are tied to what became known, during the great inflation of the 1970s, as cost-of-living adjustments. Taxes and many private-sector wage contracts are among others that are tied to the CPI.

While most economists agree that the crucial gauge is flawed in some measure, correcting it will require a trip through a political minefield. Seniors are especially sensitive to any adjustments they may see as taking dollars out of their pockets. Taxpayers could be adversely affected as well, some economists say.

Savings in the federal deficit alone could amount to $691 billion over a decade, however. Moreover, economist correctly warn that an overstated CPI with wages and other payments tied to it will itself contribute to future inflation. Inflation is a silent thief, undermining habits of thrift, planning and sound investment. All Americans have an interest in an accurate inflation gauge, just as surely as we want accurate barometers and thermometers to inform us about the weather.