As with most calculations in Keynesian economics, it doesn't take into account the devaluation of the monetary unit, at best it only looks at CPI which is extremely misleading. CPI is misleading because it doesn't consider the devaluation of the basket of goods - it assumes they've stayed the same value - and it completely ignores hard assets like housing even though that's something everyone wants to buy. Money supply expansion (total debt), or price increases of hard assets is a much better indicator of devaluation of the monetary unit, but that doesn't provide the figures they want the public to see.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford