Along with the government spewing Monopoly money around like it’s truly worth something, raising the wages for doofuses is what creates this horrible inflationary spiral we’ve undergone for decades.
For example, the $1.00 bill’s value in 1936 compares to day’s nickel! If you don’t believe it a 16 oz bottle of Pepsi cost 5 cents and today it’s well over $1.00.
That is not a good comparison. In 1936, the US had just come out of a horrific deflationary period, a currency famine, where the expression was “You could buy a pound of hamburger for a nickel, but nobody had any nickels.” Crops cost more to send to market than they were worth, so corn was being burned for fuel at the same time people in the cities were starving and had to eat at soup kitchens.
“The “great deflation” was between 1930–33 when the rate of deflation was approximately 10 percent/year, part of the United States’ slide into the Great Depression, where banks failed and unemployment peaked at 25%.
“The deflation of the Great Depression occurred partly because there was an enormous contraction of credit (money), bankruptcies creating an environment where cash was in frantic demand, and when the Federal Reserve was supposed to accommodate that demand, it instead contracted the money supply by 30% in enforcement of its new real bills doctrine, so banks toppled one-by-one (because they were unable to meet the sudden demand for cash).”
In more recent times, just the *opposite* of this happened during Jimmy Carter, when he decided to order the double digit inflation of the dollar by “printing” money, so he could have more money to spend, inflation favoring debtors.
However, Paul Volcker, the chairman of the FED, stuck it to Carter’s scheme by increasing the prime lending rate to match Carter’s money printing. This neutered Carter, by causing huge jumps in prices and wages.
Then Reagan defied expectations that he would try to stabilize and normalize the economy (which likely wouldn’t have worked and caused a crisis). Instead he went for huge (relatively speaking) deficit spending, while slashing taxes, and instead of focusing on cutting the size of government, he just cut the rate of growth of government.
But the time has truly come for a POTUS to slash the size and cost of government, among other major reforms. Which will work unless the FED stands in the way.