JMikey
March 6th, 2009, 3:20 am
One of the economic conditions that most people remember Carter for was the inflation. Double-digit inflation.
If you use the same calculations to compute CPI that Carter is judged by when people talk about him, we have been experiencing 6%+ annual inflation since the 90s. In fact, using the Carter-era CPI calculations, we were over 12% at the end of last year, before this temporary dollar rally began.
I am getting these numbers from the work of an economist named John Williams, who, out of necessity, had to become an expert on government economic reporting. He tracks the CPI using the old methods that were used under Carter and Reagan.
You can see for yourself here:
http://www.shadowstats.com
http://www.shadowstats.com/imgs/sgs-cpi.gif
To view the CPI figures using Carter-era calculations, click the Alternate Data link.
Now that we have that out of the way, consider this:
If the true inflation rate has not been 2% as we are led to believe, but more like 4 or 5, or even 8% for some people, is it any wonder it is harder and harder to support a family? Is it any wonder that most households cannot function comfortably on one income? If you got a 3% increase in a year where the real rate of inflation for you was 6%, you effectively got a 3% pay cut, and what makes it truly evil is that you did not even realize it! What about people who don't even get an increase in a given year? The only saving grace we have is that in a (mostly) free market prices come down due to efficiency and technology advances.
I will close with a quote from Lord John Maynard Keynes, The Economic Consequences of the Peace
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.
If you use the same calculations to compute CPI that Carter is judged by when people talk about him, we have been experiencing 6%+ annual inflation since the 90s. In fact, using the Carter-era CPI calculations, we were over 12% at the end of last year, before this temporary dollar rally began.
I am getting these numbers from the work of an economist named John Williams, who, out of necessity, had to become an expert on government economic reporting. He tracks the CPI using the old methods that were used under Carter and Reagan.
You can see for yourself here:
http://www.shadowstats.com
http://www.shadowstats.com/imgs/sgs-cpi.gif
To view the CPI figures using Carter-era calculations, click the Alternate Data link.
Now that we have that out of the way, consider this:
If the true inflation rate has not been 2% as we are led to believe, but more like 4 or 5, or even 8% for some people, is it any wonder it is harder and harder to support a family? Is it any wonder that most households cannot function comfortably on one income? If you got a 3% increase in a year where the real rate of inflation for you was 6%, you effectively got a 3% pay cut, and what makes it truly evil is that you did not even realize it! What about people who don't even get an increase in a given year? The only saving grace we have is that in a (mostly) free market prices come down due to efficiency and technology advances.
I will close with a quote from Lord John Maynard Keynes, The Economic Consequences of the Peace
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.