Deficit Owls | The Dollar's Value Dropped 95% Since 1900...But Standard of Living Rose 1000% @deficitowls5296 | Uploaded April 2017 | Updated October 2024, 4 hours ago.
Warren Mosler, on with Steve Grumbine of Real Progressives, discussing the drop in value of the US dollar over the last 100 years. Often libertarians and other folks like to point out that the purchasing power of $1 (typically relative to gold) has declined by around 95% in 100 years. However, Mosler makes a few replies.
First, this is an implied inflation rate of about 3% per year, which is not far off from the official government target of 2% per year. So if the people think the government's inflation target is too high, they're welcome to petition their democratically elected leaders to change it.
And second, while it might be true that $1 buys less, this completely ignores everything else in the economy that's changed since then! Real wages are far higher, meaning each hour of your labor buys way more than it did 100 years ago. Standard of living is around 10 times higher. Dollars can buy technology that didn't even exist 100 years ago, making life dramatically better.
A one more point in reply that Mosler didn't mention: interest rates over the last 100 years have been generally above or close to the rate of inflation. So as long as your money was in basically any form of savings other than under your mattress, you not only didn't lose value but gained it. People are upset because if you had $1 in 1900 then you'd need $95 today to match the purchasing power, but if you had put that $1 in the stock market in 1900, then you'd have over $300 today.
Data on standard of living, as measured by GDP per capita: visualizingeconomics.com/blog/2011/03/08/long-term-real-growth-in-us-gdp-per-capita-1871-2009
Watch the whole video here: youtube.com/watch?v=1RJP52bwmcw
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Warren Mosler, on with Steve Grumbine of Real Progressives, discussing the drop in value of the US dollar over the last 100 years. Often libertarians and other folks like to point out that the purchasing power of $1 (typically relative to gold) has declined by around 95% in 100 years. However, Mosler makes a few replies.
First, this is an implied inflation rate of about 3% per year, which is not far off from the official government target of 2% per year. So if the people think the government's inflation target is too high, they're welcome to petition their democratically elected leaders to change it.
And second, while it might be true that $1 buys less, this completely ignores everything else in the economy that's changed since then! Real wages are far higher, meaning each hour of your labor buys way more than it did 100 years ago. Standard of living is around 10 times higher. Dollars can buy technology that didn't even exist 100 years ago, making life dramatically better.
A one more point in reply that Mosler didn't mention: interest rates over the last 100 years have been generally above or close to the rate of inflation. So as long as your money was in basically any form of savings other than under your mattress, you not only didn't lose value but gained it. People are upset because if you had $1 in 1900 then you'd need $95 today to match the purchasing power, but if you had put that $1 in the stock market in 1900, then you'd have over $300 today.
Data on standard of living, as measured by GDP per capita: visualizingeconomics.com/blog/2011/03/08/long-term-real-growth-in-us-gdp-per-capita-1871-2009
Watch the whole video here: youtube.com/watch?v=1RJP52bwmcw
Follow Deficit Owls on Facebook and Twitter:
facebook.com/DeficitOwls
twitter.com/DeficitOwls
And follow our sister page, Modern Money Memes:
facebook.com/ModernMoneyMeme
twitter.com/ModernMoneyMeme
