The government cooks the books on inflation. If you compare economic output to actual commodity prices, you'll see that America's total GDP has decreased since the turn of the century.
Listen to this post: Twilight Patriot - 22 Feb 2019
According
to President Trump, “we are considered far and away the hottest economy
anywhere in the world,” and “our economy is thriving like never before.”
But he
was going to say that no matter what. What nobody in the government will admit
is that real per-capita GDP is down 25% since the turn of the millennium.
GDP is
currently about $20.7 trillion, compared with $10.4 trillion in 2000. According
to the Federal Reserve, a dollar today is worth 68¢ back then.
So the
real growth is a factor of 20.7 / 10.4 × 0.68 = 1.35. Population also grew, but
not by as much, so per-capita the economy expanded by a factor of 1.17.
Except
that it isn’t true. The government understates inflation in order to pay out
less social security, and avoid the embarrassing admission that our economy
peaked in the 1990s and has been going downhill ever since. To see how much the
dollar has really declined, just look at the price changes in some actual
commodities.
Gold $273 per oz. in 2000 $1326 today × 4.86
Silver $6.69 per troy ounce $15.80 today × 2.36
Copper 84¢ per pound $2.73 today ×
3.25
Corn $2.32 per bushel $3.81 today × 1.64
Soybeans $5.08 per bushel $9.18 today ×
1.81
Crude Oil $38.78 per barrel $53.79 today ×
1.39
If we are
to believe the Federal Reserve’s line – that a dollar today is worth 68¢ in
2000 – then prices should only have gone up by a factor of 1.47. But except for
oil, all the prices have gone up way more than that. The geometric mean of
those six increase factors is 2.31. By that calculation, your dollar today is
worth only 43¢ in 2000’s money.
So how
does the Fed get its phony numbers? It uses something called the Consumer Price
Index (CPI), a big list of prices of things that urban people buy. When buying
habits change, so does the composition of the index. If, due to the bad
economy, people start buying cheaper and inferior products, the CPI treats
those new products as equivalent and doesn’t register a decline in real income.
Example:
Plantains, a fruit which looks like a banana but taste like a cross-breed of
potatoes and styrofoam, might be substituted for actual bananas during a
recession. So the CPI regards them as equivalent, and the lower price (which
was paid in exchange for a lower-quality good) tilts the measured inflation
rate downward.
With the
actual, 43-cent-on-the-dollar inflation rate, America’s GDP is only 86% of what
it was in 2000. And per-capita GDP is 75% of what it was back then.
Those are the facts. And remember, because of
rising income inequality, median household income has done even worse. It went
from $40,750 in 2000 to $61,370 today, a decline to 65% of what it once was,
when you factor in actual inflation.
I started
out this post by criticizing President Trump. I’m still going to vote for him
next year, because Republicans are still the better of the two parties. But
they’re not going to turn this country around – no one is – and people need to
realize that.

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