Outcast_Searcher wrote:KJ, you're a smart guy. Even though I don't always agree with your ideas, you use logic, etc.
Can you help me out here?
You say (as do very many folks) that the real (i.e. "true", I presume) inflation rate is "much higher than official figures", yet you cite nothing to back that up. Where do I look to find the "real" inflation rate, or at least something better than the official figures? Does the place you cite have a specific methodology and demonstrable objective data to back up their claims that inflation is "much higher"?
(I see people claiming this virtually every week on the internet, but not knowing whether they are just spouting emotion, some series of random blogger sites, or hopefully something much better, I find it hard not to dismiss such claims. Since you're making them, I am sincerely hoping you can educate me on the evidence).
I agree we generally can't afford the endless list of "stuff for free" programs the far left proposes. They tend to lack an ability to comprehend the scale of available money the way the far right tends to lack the ability to give credit to the success of the scientific method and the data it produces.
However, I'd like to point something out (which the far left tends to HATE). The assumption that the middle and lower classes are growing ever poorer due to income not keeping up is questionable. This ignores the fact that for a great many products that enhance the quality of life and (to some extent) define what middle class is, the products have gotten so much cheaper AND better that for a tiny amount of, say, 1970 real dollars, families can (and do) buy a TREMENDOUS amount of consumer goods they couldn't even buy 50 years ago. Microwave ovens is a classic example. (Reference: the book "Myths of Rich and Poor" by Michael Cox and Richard Alm.
Especially now that the ACA heavily subsizes medical care for "the poor", the idea that "the poor just can't keep up" despite all the social programs and how products have changed, doesn't really hold up. (Not being able to afford the latest and greatest of everything is FAR different than not being able to be comfortable, much less survive).
To me, the true inflation rate is apparent from personal experience. I have lived 64+ years so far.
In 1967 when I started driving, gas was $0.18/gal. Today it is $3.59 and has been as high as $5.65 in the past couple of years. Call it 3140% inflation in 49 years.
In 1958, I remember buying fresh white bread at a bakery for $0.05 a one pound loaf. Today I paid $2.99, call it 5989% inflation in 58 years.
I remember when new Jeeps were below $1000 and I could not afford one - today they are $40,000, call it 4000% inflation in 50 years.
I remember when comic books had 44 pages and cost $0.07 each. Today a less entertaining "graphic novel", about the same size, is $17.99, call it 25,700% inflation in 50 years.
I remember candy bars for $0.05 that were larger than the $0.99 ones they sell today. Call that 2000% inflation in 40 years.
I could go on and on - but understand that the COLA (cost of living adjustment) used to adjust government dole programs excludes the cost of fuel and food - it measures only durable goods and housing and clothing and sundries - does that seem right to you?
I did not "cherry pick" my statistics - there just are not that many things I remember buying 50 years ago, along with prices.
I understood the value of money in the 1960's, and (judging by the prices I remember and can compare) The 1965 dollar is worth about 100X what the 2015 dollar is worth in purchasing power. But by the official Federal Bureau of Labor statistics, the 1965 dollar has 7.317X the purchasing power of today's dollar.
Remember that inflation compounds the same way bank interest does - you don't add up the figures over the years - you multiply. Which is why the BOL statistics tell you that after a decade of <1% inflation, total inflation is 20% - and I would place it at 50% myself. And since I started noticing the value of money in the 1950's, true inflation seems to be about 10,000%.
You really can't call it any closer than that - as you correctly pointed out, we spend money on very different things today. Digital technology in particular can be considered a second industrial revolution, due to the productivity increase it affords over manual and mechanical systems. The cost of a comfortable life is indeed lower today - but I believe that currency inflation is still robbing us of the quality of life enjoyed by our parents.