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Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

forbes.com

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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#141

Post by [deleted] »

kcplate wrote: post #134
woodruffw wrote: post #39

Earlier quoted context omitted.

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. This is a ridiculous exaggeration: the average US household was 3.7 people in the 1960s, not over 6[1]. There are good reasons to hold politicians to task for recent abnormally high inflation. But this comment is more of an atavistic fever dream of the past than an expression of those reasons. Edit: anot…

Ok putting the fever dream aside, even at 3.7 people per household the 1963 to 2024 numbers as it relates to income vs cost of living is pretty eye opening. You are not really disproving the general point by getting fussy over the numbers.

[deleted]

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#142

Post by 4death4 »

woodruffw wrote: post #39
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. This is a ridiculous exaggeration: the average US household was 3.7 people in the 1960s, not over 6[1]. There are good reasons to hold politicians to task for recent abnormally high inflation. But this comment is more of an atavistic fever dream of the past than an expression of those reasons. Edit: anot…

The average household also includes empty nesters and people who have moved out yet haven't started a family yet. The average number of children per family in the 60s was 2.3, which means quite a few families had 3 or 4 children.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#143

Post by willcipriano »

adriand wrote: post #33
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

But it’s not like our standard of living has remained static while we need to work more. A lot has changed. In 1960 the average single family home was 1300 square feet, now it’s more than double that, and it’s packed with amazing amenities and entertainment options. What would an iPad cost in 1960? Obviously the question is kind of nonsensical and yet on the other hand, if you were to try and quantify the price of ou…

> 1960 the average single family home was 1300 square feet, now it’s more than double that

It's the same house. They put drywall up in the basement and walls around the porch and call it a sun room.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#144

Post by [deleted] »

woodruffw wrote: post #138
kcplate wrote: post #134

Earlier quoted context omitted.

Ok putting the fever dream aside, even at 3.7 people per household the 1963 to 2024 numbers as it relates to income vs cost of living is pretty eye opening. You are not really disproving the general point by getting fussy over the numbers.

The current average US household has 3.1 members. There’s an important discussion to be had about cost of living and stagnant wages despite productivity, but as I said in another comment: that conversation needs to be factually grounded. Vague reactionary handwringing about the good old days isn’t going to cut it, especially when the good old days weren’t all that great by contemporary standards (or for contemporary…

[deleted]

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#145

Post by grobbyy »

tonymet wrote: post #104
nytesky wrote: post #70

Earlier quoted context omitted.

The “one income household” model of the 50s worked for two reasons. 1) the rest of the world was in ruins, so for 50s-60s US was sole industrial power more or less. 2) artificial labor “scarcity” where POC and women were banned from many occupations. The remaining available labor (ie white men) had more leverage.

Is the argument that true inflation should be worse than CPI because it helps with diversity?

I think the argument is that inflation is complicated by globalism.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#146

Post by kcplate »

woodruffw wrote: post #138
kcplate wrote: post #134

Earlier quoted context omitted.

Ok putting the fever dream aside, even at 3.7 people per household the 1963 to 2024 numbers as it relates to income vs cost of living is pretty eye opening. You are not really disproving the general point by getting fussy over the numbers.

The current average US household has 3.1 members. There’s an important discussion to be had about cost of living and stagnant wages despite productivity, but as I said in another comment: that conversation needs to be factually grounded. Vague reactionary handwringing about the good old days isn’t going to cut it, especially when the good old days weren’t all that great by contemporary standards (or for contemporary…

You still haven’t addressed the greater point. Instead you are fixating on the accuracy of least important number in the point the original commenters post. I suspect it’s because it’s the only one you can pick at. The point being can the average single income household of 3.x in 2024 afford house, car, groceries, etc at the same ability as the average single income family household of 3.x in 1963?

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#147

Post by TMWNN »

tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

>The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you.

"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —Jeff Bezos https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...>

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#148

Post by notjoemama »

woodruffw wrote: post #138
kcplate wrote: post #134

Earlier quoted context omitted.

Ok putting the fever dream aside, even at 3.7 people per household the 1963 to 2024 numbers as it relates to income vs cost of living is pretty eye opening. You are not really disproving the general point by getting fussy over the numbers.

The current average US household has 3.1 members. There’s an important discussion to be had about cost of living and stagnant wages despite productivity, but as I said in another comment: that conversation needs to be factually grounded. Vague reactionary handwringing about the good old days isn’t going to cut it, especially when the good old days weren’t all that great by contemporary standards (or for contemporary…

If we’re to correct the exuberance of emotion then this reactionary reply doesn’t fit either.

On the topic, I found this informative: https://www.in2013dollars.com/us/inflation/1963?amount=1

“ $1 in 1963 is equivalent in purchasing power to about $10.21 today, an increase of $9.21 over 61 years. The dollar had an average inflation rate of 3.88% per year between 1963 and today, producing a cumulative price increase of 920.69%.”

Also: https://www.census.gov/library/publications/1964/demo/p60-04...

“ The median income of all families in 1963 was about $6,200; but for families headed by college graduates, the median was $9,700. The median for all families was about $290, or 5 percent, higher than in 1962. Consumer prices rose during this period by about 1 percent; therefore, not all of this amount represented a net gain in purchasing power for the average family.1

Median family income in current dollars has more than doubled in the postwar period (from about $3,000 in 1947 to about $6,200 in 1963). This rise was accompanied by a gradual upward shift of families on the income scale. However, consumer prices have risen substantially during this period so that only about three-fifths of the increase in current-dollar incomes represented an increase in real income. In terms of constant (1963) dollars, median family income increased from $4,200 in 1947 to $6,200 in 1963. This increase was less pronounced than the increase in current-dollar income, but it was nevertheless substantial.”

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