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USD Purchasing Power in Real Time Since 2000

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Re: USD Purchasing Power in Real Time Since 2000

#21

Post by Avicebron »

JumpCrisscross wrote: post #20
slg wrote: post #18

Earlier quoted context omitted.

It's a problem that our society is designed for and judged in relation to capital. Most people are paid in dollars, not shares of the S&P 500. 38% of the population doesn't even own any stocks[1]. We can't act like the dropping dollar value is fine simply because stock investments are outpacing those losses. Maybe that tradeoff benefits the people reading this, but it hurts a huge number of Americans. [1] - https://n…

> Most people are paid in dollars Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.) [1] https://fred.stlouisfed.org/series/LES1252881600Q [2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007

Measurements like this obfuscate other costs that aren't well tracked. Healthcare and housing being two big ones.

Re: USD Purchasing Power in Real Time Since 2000

#23

Post by JumpCrisscross »

Avicebron wrote: post #21
JumpCrisscross wrote: post #20

Earlier quoted context omitted.

> Most people are paid in dollars Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.) [1] https://fred.stlouisfed.org/series/LES1252881600Q [2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007

Measurements like this obfuscate other costs that aren't well tracked. Healthcare and housing being two big ones.

> Healthcare and housing being two big ones

Almost all BLS price indices, including CPI, include housing. (CPI measures the “rent of primary residence, owners' equivalent rent, utilities, bedroom furniture” [1].)

That said, this is the second time I've come across this myth on HN in less than a week. Where did you hear that price indices don't track healthcare and housing costs?

[1] https://www.bls.gov/opub/hom/cpi/concepts.htm#the-cpi-as-a-c...

Re: USD Purchasing Power in Real Time Since 2000

#24

Post by JumpCrisscross »

0xbadcafebee wrote: post #15

The real time number isn't as interesting as the potential future number. If the dollar stops being the reserve currency, the purchasing power of the dollar will crash. No more cheap borrowing, no more low interest rates, hello constant high inflation. The Iran war has made that increasingly likely to happen. It may even have been intentional. https://www.jpmorgan.com/insights/global-research/currencies... | https://…

> If the dollar stops being the reserve currency, the purchasing power of the dollar will crash

This is far from clear.

Re: USD Purchasing Power in Real Time Since 2000

#27

Post by Aurornis »

slg wrote: post #18
Aurornis wrote: post #13

$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation. Don’t keep your retirement savings all in cash.

It's a problem that our society is designed for and judged in relation to capital. Most people are paid in dollars, not shares of the S&P 500. 38% of the population doesn't even own any stocks[1]. We can't act like the dropping dollar value is fine simply because stock investments are outpacing those losses. Maybe that tradeoff benefits the people reading this, but it hurts a huge number of Americans. [1] - https://n…

> It's a problem that our society is designed for and judged in relation to capital.

Cash is also capital.

If you were trying to say it’s a problem that our economic system favors deploying capital into investments instead of hoarding cash, I disagree. An economy where everyone is incentivized to hoarde cash instead of deploying it to investments doesn’t progress because the smartest thing you could do with your money is to not invest it in new businesses or buildings. It doesn’t work.

> Most people are paid in dollars, not shares of the S&P 500.

You’re conflating income and savings.

It wouldn’t matter if you got paid in dollars or in S&P 500 shares of the same dollar value. You can exchange one for the other. In the year 2026 you can do that instantly from your phone with an app and not pay any fees.

The point was not that S&P 500 shares are a superior unit of trade, because they’re not. I’m trying to explain that long term savings needs to be in an investment, not sitting around in actual cash.

Re: USD Purchasing Power in Real Time Since 2000

#28

Post by ambicapter »

vessenes wrote: post #8
drbig wrote: post #5

As much as the notion of "Purchasing Power" is economic, thus perhaps having a greater chance of being related to reality, I've been wondering if - and how - could these long-term measures account for greater diversity and "scale" of "things money can buy". Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were. On the other end of the sc…

The best example I heard recently was anesthesia. Costs less than $5 to make. Worth a lot more if you have surgery coming up.

The cost of anesthesia is surely concentrated in the labor involved more so than the cost of the chemicals, no?

Re: USD Purchasing Power in Real Time Since 2000

#29

Post by Aurornis »

Avicebron wrote: post #21
JumpCrisscross wrote: post #20

Earlier quoted context omitted.

> Most people are paid in dollars Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.) [1] https://fred.stlouisfed.org/series/LES1252881600Q [2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007

Measurements like this obfuscate other costs that aren't well tracked. Healthcare and housing being two big ones.

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