Someone decided to turn that brainwashing machine on.
In nazi germany they gave free TVs...
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No inflation
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In nazi germany they gave free TVs...
amazing thread. Pretty much every comment i had to go back and do research and learned hellva lot.
So we're in the period following a devastating war that the U.S. lost and the U.S. is subjected to punishing reparation payments like the Weimar Republic? Or did you just pick a historically bad case of inflation that has absolutely nothing in common with the current situation and throw it in because ????
A couple of thoughts on that. First off, "cumulative inflation" is a pretty deceptive chart to show. Let's take a look at this more relevant chart of actual inflation by year:
Hmm, looks like inflation is on a definite downtrend over the last nearly half century to me, how about you?
Then let's talk about the statement "it proves that sound money has indeed worked in practice". What exactly does "worked" mean. Let's take a look at this inflation adjusted measure of GDP per capita in the same timeframe you showed.
Wow, looks like that period of low inflation you're so proud of also led to complete stagnation of our productivity and wealth. If "no inflation" is the be-all end-all to you, then sure, tying our national economy to something entirely arbitrary like the amount of a certain mineral we pull out of the ground is a great idea. If you'd prefer to have the average American live in a one bedroom home without running water, AC, or central heat with a significantly reduced lifespan, significantly less access to transportation, information, or entertainment, then yeah, the 1850s were swell, I'm sure you can't wait to go back. The rest of us are pretty damn happy with the unprecedented 100 years of growth in prosperity we've seen.
Not in the chart below.
Complete stagnation? Let's work this out. Real GDP per capita (2012 dollars) was
$1,800 in 1789
$10,000 in 1919
$49,000 in 2009
So far, that's a CAGR of 1.33% for the first 130 years vs. 1.78% for the next 90 years.
However, the official CPI methodology has been changed several times such that the index reads vastly lower post 1980. Source: www.shadowstats.com/alternate_data/inflation-charts
Correct for the CPI manipulation and real growth rates per capita aren't materially different pre and post 1919.
So you've got no problem using the cumulative graph but mine isn't valid? Gotcha. Not sure where you got your numbers because they don't match what I found, but for arguments sake let's use them. The time period you apparently think of as superior to our time period grew at a rate that was 33% lower than the time period you seem to think is bad! That's good? Something we should want to go back to?
As you can clearly see from my graph, while you don't seem to think a 33% difference in CAGR is significant over decades, it is massively significant. Once again, are you seriously saying the left hand side of the chart is better than the right hand side?
And this is a somewhat moot point because to care about inflation being zero requires you to buy into the debunked concept that inflation is inherently bad at any level. But for arguments sake lets talk about this "CPI manipulation" conspiracy tangent where we just make up charts to say whatever we want because we're "fixing" them (reminds me of our old friend Dean Chambers of unskewedpolls.com). Could you point to just one specific item in the current CPI handbook of methods that has been "manipulated". You can find it here (cpi.pdf (bls.gov)). Although I'm sure there was no need to provide the link because you have read through it cover to cover and are very familiar with it, right? I mean if you were to have an intellectually honest conversation about it where you allege it's "manipulated", at the very least you would have had to have read through it at least once? So here's a challenge, without engaging in confirmation bias where you do this backward thing of searching Google or going to your conspiracy theory website for support of a conclusion you previously reached without any actual data, let me know very specifically what is "manipulated" in the current CPI, to the specific pages please, and specifically why?
You can do this without cheating with Google, I trust you must not need to cheat given the strength of those convictions on the subject! I mean I'm more than happy to talk about quality/new goods bias and how you can't compare the cost of a buggy in 1790 with a Toyota Corolla in 2021 or how we take into account the cost of oil which came from whales in 1790 and was used to light lamps versus the cost of oil today which pervades our economy. Any little quirks of the CPI I'm happy to discuss, but only if you actually knew about them and used them to form your original conclusion that it is "manipulated", not what you copy and paste from "shadowstats.com" without thought or understanding. Seems fair, don't you think, I mean you are interested in an intellectually honest conversation aren't you?
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Attached is the exact source of data I used, gdp_current_real_per-capita_1789-2012.pdf. Which is the same as yours, Economic History at www.eh.net. Only difference is mine is inflation adjusted to 2012 dollars, yours was 2000 dollars.
The problem is you're showing real GDP growth on a linear scale. Assuming the growth is an exponential function, you'd make more sense using a log scale. Even when adjusted to 2012 buying power, growth of $1,000 in 2012 is far less significant than growth of $1,000 in 1800.
Below I made up a similar chart. Starts at $1,800 in 1800 and grows at a constant 1.5% each year. Because the scale is linear, you might think there's a difference between the left hand side of the chart vs. the right hand side. There isn't.
The thing is that the official U.S. government methodology of calculating the CPI has changed over the years. Using the old U.S. government methodology that was current in the 1980s, today's inflation rate is vastly different.
Pointing out something in only today's handbook is therefore meaningless. What matters is how the official methodology has changed over time. Feel free to prove that the methodology hasn't changed since the 1980s.
