Free Republic

Despite what feels like the constantly rising costs of modern life, the prices of some essential commodities such as gas and eggs have actually remained relatively stable compared to dollar values and wages in the past. Other items, meanwhile, have actually become much cheaper over time, even when accounting for inflation. Innovations in technology, increased competition, and improvements in manufacturing and logistics are most often the reason for these surprising price drops. Here are seven everyday items that are much cheaper now than they were in decades past. Clothing In the mid-20th century, the average American family spent about 10%...

The International Monetary Fund (IMF) warned Tuesday that America’s recent economic performance is partially the result of the country’s unsustainable fiscal practices, creating risks for the global economy. “The exceptional recent performance of the United States is certainly impressive and a major driver of global growth, but it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability,” the IMF wrote in its latest World Economic Outlook. “This raises short-term risks to the disinflation process, as well as longer-term fiscal and financial stability risks for the global economy since it risks...

Amazon founder Jeff Bezos and Tesla and SpaceX CEO Elon Musk blame the government and the Fed for inflation. In Musk’s words, “The obvious reason for inflation is that the government printed a zillion more dollars than it has. This is not super complicated.” They and other luminaries subscribe to the inflation sophism: “too much money chasing too few goods.” Yes, we’ve had “too few goods,” due to a pandemic perfect storm — depressed U.S. oil production and manufacturing output, severe supply chain disruptions and war-like labor shortages — but that won’t endure. It was exacerbated by Russia’s invasion of...

In a world in which the Cold War is a fading memory, North Korea and Cuba endure as museums of communism, so no one will forget how criminally insane it always was. In a world haunted by the specter of persistently falling prices, some countries are creating severe inflation, so we can be grateful for its virtual disappearance. One of the governments providing this public service is that of Venezuela, where the currency has lost so much value that even robbers reject it. A recent carjacking victim told The New York Times his armed captors had no interest in his...

The Federal Reserve has already injected hundreds of billions of new dollars into the economy since the recession started. Normally, when the government prints up more money, dollars are worth less and that is what we call inflation. But inflation has been surprisingly low. One measure of the money supply, M1, which includes currency as well as checking accounts, soared by 26 percent between August 2008 and September this year. The amount of currency more than doubled. But prices barely changed. As Fed Chairman Ben Bernanke goes forward with plans to print up another $880 billion, someone has to ask...

Tue September 16, 2003 11:02 AM ET By Eric Burroughs NEW YORK, Sept 16 (Reuters) - U.S. consumer prices rose less than expected in August despite a surge in energy costs and underlying inflation fell to the slowest annual rate in 37 years, the government said on Tuesday in a report that suggests the economy is not yet safe from the dangers of deflation. That means the Federal Reserve, at its policy meeting on Tuesday, will likely repeat its pledge to keep the federal funds rate, now at a 45-year low of 1 percent, for a "considerable" amount of time,...

Eurozone inflation fell below the European Central Bank's 2 per cent threshold in July, official statistics showed on Tuesday. Eurostat, the statistical arm of the European Union, said the annual rate of inflation fell to 1.9 per cent compared to 2 per cent in June. That was prompted by a 0.2 per cent drop in prices, the largest monthly fall in two years. Declines in the cost of clothing - down a monthly 5.5 per cent, and food, which was 0.3 per cent lower, were particularly marked. The strongest price rises were seen in the hotels and restaurants sector -...

There are far too many inadequate impressions about deflation going around. A policy culture dedicated to "stimulation" through forced credit expansion with the attendant currency depreciation makes any discussion about deflation seem alien. Unfortunately, even resorting to an economics dictionary is not too helpful. Disinflation, being benign, is described as a "planned reduction" in the general price level. Being destructive, both inflation and deflation are described as "sudden", laying off any blame upon misguided consumers. The deliberate misunderstanding of the "flations" ? either "in" or "de" ? was contrived by Keynes in the early 1930s. Until then, inflation was considered...