From the “Was Brett Correct?” series of questions, we can wonder aloud whether this assessment was accurate:
Whole Foods and others are dying because, despite our “great” economy, most people are suffering a loss of ready cash because the cash is worth 40% less than pre-Obama money.
As it turns out, information exists to support this idea even though it is hard to accurately estimate. Our cost of living has risen, which means that our money is buying a lot less than it used to:
The Bureau of Labor Statistics keeps track of annual inflation rates and is a great resource for comparing today’s prices to those of yesteryear. A metric called the Consumer Price Index is especially useful. This metric measures the average price change over time of all consumer products purchased in urban areas. While not exactly a cost of living index, the CPI is an excellent indicator of inflation and is widely used to inform public policy and legislative changes in programs such as Social Security. The BLS also makes available an inflation calculator to find out how much inflation has degraded the dollar during a certain period. For example, according to the most recent data collected by the BLS, current as of July 2018, what would have cost $20 in 1998 would now cost nearly $31.
Because wages, Social Security payments, and taxes are adjusted for inflation annually, however, it would seem that while things may cost more than they did 20 years ago, people should in theory be making more money to pay for those things. The information provided by the CPI doesn’t show the cost of living change directly, but the amount of price change that is not attributable to inflation can be extrapolated from the CPI figures. For example, the Bureau of Census reports that the average price of a new home in June 1998 was $175,900.
According to the inflation calculator, that price today should be $271,950. The same report places the average sale price for June 2018 at $368,500; however, more than 35 percent higher than the price when accounting for inflation alone.
No one has assessed of all the factors involved, including shrinking packages and reduced quality, but these figures put us in the ballpark of my estimate.
The Obama years showed an increase in taxes and diversity regulations, raising costs which were passed on to the consumer. In addition, up to $10 trillion was dumped on the population through car buybacks, welfare, and other government programs.
Not surprisingly, this made life more expensive at the same time it made money more easily acquired, therefore worth less in actual value.