US Inflation: Difference between revisions
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Most of us know that high [http://amerimetrics.com/index.php?title=Glossary_of_Common_Terms#:~:text=Britannica-,inflation,-%2D%2D%20generally%20defined%20as inflation] is bad, but deflation (negative inflation) is detrimental. Stable prices, frequently referred to as ''price stability,'' is achieved through a balance of ''supply'' and ''demand.'' Common causes of inflation include increases in money supply (governments creating more currency) and supply chain disruptions, as are common during wars and also are triggered by the inability to supply enough of a critical commodity, like oil, corn, orange, and chicken. Deflation frequently occurs when demand drastically decreases, often triggered by recession, and itself can lead to a viscious cycle leading to | === A Background === | ||
Most of us know that high [http://amerimetrics.com/index.php?title=Glossary_of_Common_Terms#:~:text=Britannica-,inflation,-%2D%2D%20generally%20defined%20as inflation] is bad, but deflation (negative inflation) is detrimental. Stable prices, frequently referred to as ''price stability,'' is achieved through a balance of ''supply'' and ''demand.'' Common causes of inflation include increases in money supply (governments creating more currency) and supply chain disruptions, as are common during wars and also are triggered by the inability to supply enough of a critical commodity, like oil, corn, orange, and chicken. Deflation frequently occurs when demand drastically decreases, often triggered by recession, and itself can lead to a viscious cycle leading to severe recessions or depressions. | |||
Often economic growth and inflation are closely linked. Years of low inflation are not necessarily positive if growth was also very low, or even negative. This is why other metrics such as ''real GDP,'' or GDP adjusted for inflation, employment rates, and income and savings should be considered to assess whether the living standards are increasing or decreasing for citizens of an economy. | |||
Recent inflation has been referred to by a presidential candidate as the "worst in our nation's history" and that it would "ravage the economy." Data of historical US inflation overwhelmingly refute these claims. | Recent inflation has been referred to by a presidential candidate as the "worst in our nation's history" and that it would "ravage the economy." Data of historical US inflation overwhelmingly refute these claims. | ||
=== A Modern History 111 Years === | |||
When comparing the 8.0% inflation of 2022 to 111 years of recent inflation data, there were twelve years during which inflation was higher. Two of those years had inflation more than double, at 17.8% and 17.3%. There were also five years during which we experienced deflation greater than 5%, all during severe depressions of 1921 and 1931. In total, there were seventeen years where price stability was worse, or far worse than our recent experience with inflation. | When comparing the 8.0% inflation of 2022 to 111 years of recent inflation data, there were twelve years during which inflation was higher. Two of those years had inflation more than double, at 17.8% and 17.3%. There were also five years during which we experienced deflation greater than 5%, all during severe depressions of 1921 and 1931. In total, there were seventeen years where price stability was worse, or far worse than our recent experience with inflation. | ||
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[[File:111 Years of Inflation.png|thumb|800px]] | [[File:111 Years of Inflation.png|thumb|800px]] | ||
[[File:111 Years of Inflation Rank Sorted.png|thumb|800px]] | |||
=== A Complete History === | |||
The following research are made possible by the great work referenced below: | |||
[https://measuringworth.com/datasets/uscpi/result.php# Lawrence H. Officer, "What Was the Consumer Price Index Then? A Data Study"] | |||
[http://www.measuringworth.com/uscpi/ Samuel H. Williamson, "The Annual Consumer Price Index for the United States, 1774-Present," MeasuringWorth, 2024.] | |||
Revision as of 22:11, 2 October 2024
A Background
Most of us know that high inflation is bad, but deflation (negative inflation) is detrimental. Stable prices, frequently referred to as price stability, is achieved through a balance of supply and demand. Common causes of inflation include increases in money supply (governments creating more currency) and supply chain disruptions, as are common during wars and also are triggered by the inability to supply enough of a critical commodity, like oil, corn, orange, and chicken. Deflation frequently occurs when demand drastically decreases, often triggered by recession, and itself can lead to a viscious cycle leading to severe recessions or depressions.
Often economic growth and inflation are closely linked. Years of low inflation are not necessarily positive if growth was also very low, or even negative. This is why other metrics such as real GDP, or GDP adjusted for inflation, employment rates, and income and savings should be considered to assess whether the living standards are increasing or decreasing for citizens of an economy.
Recent inflation has been referred to by a presidential candidate as the "worst in our nation's history" and that it would "ravage the economy." Data of historical US inflation overwhelmingly refute these claims.
A Modern History 111 Years
When comparing the 8.0% inflation of 2022 to 111 years of recent inflation data, there were twelve years during which inflation was higher. Two of those years had inflation more than double, at 17.8% and 17.3%. There were also five years during which we experienced deflation greater than 5%, all during severe depressions of 1921 and 1931. In total, there were seventeen years where price stability was worse, or far worse than our recent experience with inflation.
The inflation of the past four years: 4.7%, 8.0%, 4.1%, and 2.6% (year-to-date), rank 28, 13, 33, and 57. Recent price instability are hardly noticeable, when compared to the inflation experienced during the two world wars, the persistent inflation in the 1970s and 1980s, and the extreme deflation during the early 1920s and early 1930s.
There are also some reliable resources that contain our nation's complete price stability over nearly 250 years, and there are at least four more periods of much higher and prolonged periods of inflation, not to mention a significant number of prolonged periods of deflation.
What we just experienced was insignificant in our nation's history. Compared to the experiences of our forefathers, I'm embarrassed to think of recent years as a hardship. Perhaps, we have become weak and spoiled as to how great our nation truly is.
A Complete History
The following research are made possible by the great work referenced below: Lawrence H. Officer, "What Was the Consumer Price Index Then? A Data Study" Samuel H. Williamson, "The Annual Consumer Price Index for the United States, 1774-Present," MeasuringWorth, 2024.
