Prices, the FED, and Elections

cropped-bob-shapiro.jpg   By Bob Shapiro

I came across a web site which has a comparison of food & gasoline costs over the last 60 years: the same staple items in 1954, 1984, and 2014. Not surprisingly, prices are up – way up.

The same basket of goods which today costs $28.38, cost $11.26 in 1984. And, it cost only $3.68 in 1954! Prices for these items have gone up almost 8 times during the last 60 years – that’s a compounded annual rate of about 3.5%!

60 Year Prices

Click the link to view the brief video (yes the site has a brief commercial).

Now, all else being equal, a rational person would think, “Hey, the technology and methods needed to bring these items to my table have improved DRAMATICALLY over the last 60 years, so why haven’t prices gone down, instead of up? With productivity up 2.5% a year, prices should have gone to about 1/5 of the price of 60 years ago.”

Please excuse the uneducated oaf who just asked that question. All else is NOT equal. Since Eisenhower’s Presidency, the long – expensive – arm of the government has become more and more intrusive, pushing prices up. But, this biggest single factor is the FED’s debasement of the US Currency, the Dollar.

Rule of 72

If you combine the actual 3.5% rate of price increases with the 2.5% of price lowering productivity improvements, the FED’s (and federal government’s) activities over these last 60 years have robbed all Americans of 6% (each and every year) of what a Dollar’s purchasing power SHOULD have been. Prices today are about 33 times as high as they should have been for gasoline and the food items shown!

I have seen precious few Republican leaders who understand this basic economics, let alone care about this theft. I have seen zero on the Democratic side (please let me know if there are any).

Your vote is too valuable to throw away on more of the same. Next year is yet another US Presidential election year. Please don’t let it go by without your urging the media to hold the candidates’ feet to the fire.

Don’t give your money or your vote to any candidate who doesn’t understand basic economics, who won’t promise to rein in the government’s profligacy, and who won’t promise to end the FED.

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