Austerity will worsen the crisis, because it is built on a lie.

[Obama 2012 1,714]

Ah - understood.

What was the average wage back then (in today's dollars)? Just curious.

well, think of it this way.

Let's say you were making a nickel an hour back then.

You should be making $20 an hour today.

[Nina~ 431]

Inflation = Devaluing of the currency.

Deflation = Strengthening of currency.

Inflation/Deflation have nothing to do with actual prices. Prices really are irrelevant and are a consequence of the items listed above.

You claim that $20 for a loaf of bread isn't a big deal when wages keep up, however you're creating a false/temporary stability by keeping wages up and creating an even bigger problem (as i already stated) when a currency strengthens and the prices adjust with them.

The chart is highly flawed in thinking that constant government intervention in sitautions like that is good. Sure, you'll notice a temporary reprieve, but you don't solve the overall problem at all. In fact all you do is stop an economic bubble from bursting right then and you re-inflate it eventually to a point when it does burst it will be 10x worse than when it almost did the first time.

Economies have to adjust. You HAVE TO let banks and companies fail. You have to deal with the consequences of mismanagement. We have become such an entitlement society, we forget the basics of what it takes to keep a steady flow of growth over time. We want everyting fixed right here and right now, which while it seems like a nice idea, it isn't the right way to go about things.

Do you honestly think our economic situation is better today than it was 3-4 years ago now? You've got blinders on in the world around you if you really think so. Sure, wall street is happy, but main street is far from it. Wall street is easy to make happy though because of the environment they've been given. They can do whatever they want without consequence, because they understand that Joe Tax Payer will bail them out. We'll just print them more money to play with, let them spend it, watch THEM increase our prices because eventhough we gave them money, they understand that the money we had to print for them is now worth less than the money they had before. They therefore go ahead and put more money into things like oil, corn, cotton, etc.... causing prices in those industries to go up, which causes consumer prices go up as well.

When you stop and understand what happens and the way our economy really works, there is no way in hell anyone could be happy with continued inflation.

Deflation is not the monster here. It is the smartest thing we could do to our currency right now. ESPECiALLY with the threat of losing it as the world's reserve. Because if we lose that status, then people will be begging and pleading for deflation or a whole new currency entirely. The US Dollar will be so worthless, that no one will want to touch it. Hell, there are plenty today who don't want to even now and that's why the IMF wants to drop the dollar.

we're talking the currency value in 1908. A loaf of bread in 1908 that cost you a nickel, would be $20 if you used today's currency back then.

Unless we decide to go back to gold standards (ie, pegging the value of the dollar to the price of gold), the Feds will have to intervene and control the supply of money. I don't know where you got the idea that the feds print money willy nilly but that is not really what they do. The fed do increase interest rates to reduce the money in circulation to combat inflation, however they will NEVER EVER let the rate of inflation fall below zero (negative inflation, aka deflation) because that is harder to control than inflation.

Personally, I have no opinion on bailouts because I do not have a degree in economics and probably don't understand the intracacies of modern US & global economy. However, it is my understanding that the economy would have fared worse had it not been for some strategic bailouts.. that is why companies like Goldman Sachs & AIG got bailouts, whereas Lehman Brothers was allowed to fail. Someone please correct me if I am wrong.

Ah - understood.

What was the average wage back then (in today's dollars)? Just curious.

I dont know where Paul got his numbers from, but this is what I got from www.measuringworth.com

Current data is only available till 2009. In 2009, the relative worth of $0.05 from 1908 is:

$1.20 using the Consumer Price Index

$0.90 using the GDP deflator

$2.60 using the value of consumer bundle

$5.23 using the unskilled wage

$8.02 using the Production Worker Compensation

$6.76 using the nominal GDP per capita

$23.40 using the relative share of GDP

[Zero Sum 305]

Ah - understood.

What was the average wage back then (in today's dollars)? Just curious.

More importantly, what was the average cost of a loaf of bread in that time?