New research from the American Institute for Economic Research confirms “a slow steady eating away” has eroded purchasing power. “Chronic … inflation even at ‘moderate’ rates leads to substantial losses of buying power over time,” it notes.
- Since 1913, the year Congress created the Federal Reserve System, the purchasing power of the dollar as measured by the Consumer Price Index has declined by 95 percent.
- Since 1979, the year after federal legislation explicitly directed the Federal Reserve that monetary policy should help ensure “stable prices,” the purchasing power of the dollar has declined by two-thirds.
- Since 1993, the year President Clinton assumed office, the purchasing power of the dollar declined by nearly a third.
- From January 2001, when George W. Bush assumed office, through December 2008, the purchasing power of the dollar declined 18 percent.
- Excluding food and fuel, prices generally increased the most from 1990 to 2008 for items heavily influenced by government policy, such as education, health care and government services. College tuition and fees increased 248.4 percent; hospital services, nursing homes and adult day care increased 222.6 percent; educational books and supplies jumped 182.5 percent; dental care 153.9 percent; garbage and trash collection 129.7 percent; prescription drugs 120.5 percent; physicians’ services 104.6 percent; and city public transportation services, 95.5 percent.
- But there was some good news. The prices of clothing, toys, audio equipment, television sets, photographic equipment, personal computers and long-distance out of state phone service all declined since 1990.