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Pardon me while I reminisce.
I remember many years ago, sometime around 1965, when my mother asked me to go to a pop machine and buy her a cola. ( I remember that day because I lost the dime that she gave me - I was very young) I had a dime because that was the price of the bottle of cola. That's right - ten cents. Eariler today when I went to one of those machines I had to pay a dollar.
A dollar? Why so much more than what I paid 40 years ago? Did the quality of the cola increase by ten times? Was it worth that much more today than what is what back then?
I took a little time to compare some other prices as well, you know, just for the fun of it, and here's what I found.
According to the US Census Department the average price of a home in 1965 was $21,500, In 1975 it was $42,600, in 1985 it was 110,800, in 1995 it was $158,700 while the average cost of a new home today is $304,700.
And according to the Federal Reserve Bank of Dallas the average cost of a home was $4,700 in 1920 and $14,500 in 1956.
| The Average Cost of a Home By Year | |||||
| 1956 | 1965 | 1975 | 1985 | 1995 | 1998 |
| $14,500 | $21,500 | $42,600 | $110,800 | $158,700 | $274,500 |
As you know, the cost of new homes is not the only thing that keeps going up. Here is a price comparison of a Large Pepperoni Pizza. You can find this information, and much more, by visiting this web page.
| Average Cost of a Large Pepperoni Pizza | |||
| 1958 | 1970 | 1980 | 1997 |
| $1.99 | $3.99 | $7.99 | $10.99 |
Was a large pepperoni pizza really worth six time more in 1997 than it was in 1958? Probably not. Then it must be that a dollar was worth six time more in 1958 than it was in 1987.
According to the Consumer Price Index put out by the U. S. Department of Labor, in 1913 the purchasing power of a dollar was about 20 times more than it was in 2005 - 2006. Try out their inflation caulculator and you'll see I tell the truth.
The following chart shows how much it cost to purchase one dollar's worth of goods based on 2003 prices.
| Conversion Factor Table: 2003 Dollar | |||||||||
| 1915 | 1925 | 1935 | 1945 | 1955 | 1965 | 1975 | 1985 | 1995 | 2005 |
| $0.05 | $0.10 | $0.08 | $0.10 | $0.15 | $0.18 | $0.30 | $0.58 | $0.80 | $1.00 |
As you can see, the value of the dollar was fairly stable until around 1945. In fact, as this chart shows, the dollar had the same purchasing power since the 1600's.
So, what I want to know is...
What happened to my money?!!
Page 2: Worth Less or Worthless?
© 2005 - 2007 In Your Face Productions
and Michael A. Thompson
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