Were prices really rising over twice as fast in 1979 and 1980 as now

[dsc]

I was alive, but a young teen back then, so I was paying for food, rent, etc so I don't really know what prices were like but I went to this link

http://inflationdata.com/Inflation/Inflation_Calculators/Inflation_Rate_Calculator.asp#results

and it claims inflation was over 13% in 79 and over 11% in 80 compared to over 4% in 2008. That strikes me as very hard to believe. It seems everytime I turn around prices rise. Was it really about 3 times as bad back then?

[annabanana]

1. Well, yeah... but that was before they took FOOD AND FUEL

OUT of the "consumer price index". .(CPI).. the thing they measure inflation by..

So it is probably really going up faster now, except we're not supposed to notice.

[AllieB]

2. Exactly. It's a way the Repubs have rigged the Inflation Index.

[dsc]

6. I guess that make some sense

those prices would be more volitable and more subject to change.

[annabanana]

8. All the more reason to keep them IN. . Those are a couple

of things that people have to pay the price of. A lot of other things in the index are things that people can actually do without if they have to.

[Warpy]

9. That's exactly right

the CPI was calculated on a market basket of goods and services that remained constant until Greenspan got the bright idea to eliminate things he didn't think poor people should have while substituting other things he didn't think they deserved. In other words, that once a week roast beef became an equivalent amount of hamburger.

Now it seems to have become so unrealistic that it eliminates anything ordinary people use every week in favor of luxuries they rarely buy but whose price has declined due to offshore manufacture.

The official inflation number is just one more con job.

[bluesmail]

3. Annabanana is correct, CPI now does not include

Food'n Fuel

[Waiting For Everyman]

4. Yes, and 15% was a good mortgage rate.

[dsc]

7. that is why I think there has to be some truth to this

if it were all measurement then the interest rates should be higher now.

[annabanana]

11. and yet the dollar bought more than it does now...

go figure. .

[NMDemDist2]

5. no, the numbers they use today are falsehoods

back then, they took the 'basket of goods' and tracked the price.

Today, if an item in the 'basket' goes high, they substitute a different item (aka steak gets switched to hamburger, boneless chicken breast to a whole chicken)

[bluesmail]

10. CPI Today is like a shell game. Think Enronomics.

[GoesTo11]

12. It was pretty bad then.

You must remember candy bars going from a dime to a quarter, records from 3.49 to 7.99, etc. in a pretty short period of time. Everything was going up like that. I think it really was worse then. Right now is the first time in a long time that inflation has been noticeable at all, and really undeniable. What's up now? Travel, healthcare, education, energy, all way up. What's not up? Manufactured goods don't seem to be up, houses and rents are dropping. Inflation can get a lot worse, though.

[Sadie4629]

13. I got married in 1978

So we were thinking about things like buying a house, saving $$, etc.

It really was BAD. Mortgage rates were literally THROUGH THE ROOF. We eventually got a house at 12.5%--and thought we were lucky to do so. The realtors were really into "creative financing." It worked fairly well, if a homeowner was borderline desperate to get rid of a house.

I remember my dh wanted a new car. We ended up paying 16.75%.

NOTHING was moving. Bad times, indeed.

[Lancer]

14. There was also the 2nd Energy Crisis in 1979

The first had occurred in 1973. In April 1979, the average price of crude oil was US$15.85 (!!!) Over the next year, the price of crude oil way more than doubled, to $39.50, after Jimmy Carter had began phasing in plans for oil deregulation. Domestic oil production went up, foreign production went down. But, because no price controls were in place on imported oil, the supply of gasoline stayed flat, and led to panic in some cases, but mostly to long lines around the block at gas stations. Some people even put chocks under the rear wheels of their cars to try to squeeze that one last drop into the tank. Locking gas caps were popular with people who had had thieves siphon the gas out of their cars while they were at work or at home asleep with the car in the driveway. (They've since become the norm, of course, and I doubt you'd find many gas stations where you can pay cash after pumping anymore.)

Oh, BTW. The average price of a gallon of gas in the US in the summer of 1979?

86 cents.