6 ms·

> I bet 100k today is roughly 50k in the year 2000. Mean inflation from 2000-2021 (last year on record) was ~2.24%, including a 4.7% increase in 2021.[1] $50k

> I bet 100k today is roughly 50k in the year 2000. Mean inflation from 2000-2021 (last year on record) was ~2.24%, including a 4.7% increase in 2021.[1] $50k inflated at this rate would be approximately $80k. I'm sure others are more qualified to discuss implications, but consider that while inflation erodes nominal purchasing power, it cannot account for effectively deflationary impacts of technology (for an example, see[2]). Of course, we cannot eat technology, at least not exactly; so we probably want to look at metrics related to how easy it is to live. It might be worth looking at cost per calorie, for example, or for commonly-available proxies (e.g., fast food prices). [1] https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i... [2] In 1999, hard drives were sized in the hundreds of megabytes and cost more than they do today. See, i.a., https://en.wikipedia.org/wiki/History_of_hard_disk_drives#2001_to_present https://en.wikipedia.org/wiki/History_of_hard_disk_drives#20....

Foobar8568 4y ago
Who cares about inflation if your rent/mortgage is 3 or 4 times higher?
- memling 4y ago
  > Who cares about inflation if your rent/mortgage is 3 or 4 times higher? Oh, for sure: inflation is challenging to measure, and it probably isn't very descriptive for a lot of common situations. (I think the Consumer Price Index is an attempt to help solve this issue. CPI compounded about about 2.1% per year between 2000 and 2021.[1,2] The CPI includes measures of rent, but it also adjusts for seasonal changes.[3]) Inflation and CPI both obscure a lot of ground-level realities for people--the nature of all summary statistics is that they fail to capture the totality of reality in favor of giving us a broad sense for what's going on. Anecdotally my folks moved after their rent increased by 50% when their lease expired. (That was last year.) These are obviously nontrivial increases that have dramatic impacts on people. [1]: https://www.rateinflation.com/consumer-price-index/usa-historical-cpi/ https://www.rateinflation.com/consumer-price-index/usa-histo... [2]: (270.97/172.2)*(1/22.) ≈ 1.021 [3]: https://www.forbes.com/advisor/investing/cpi-consumer-price-index/ https://www.forbes.com/advisor/investing/cpi-consumer-price-...

Foobar8568 4y ago

Who cares about inflation if your rent/mortgage is 3 or 4 times higher?

memling 4y ago
> Who cares about inflation if your rent/mortgage is 3 or 4 times higher? Oh, for sure: inflation is challenging to measure, and it probably isn't very descriptive for a lot of common situations. (I think the Consumer Price Index is an attempt to help solve this issue. CPI compounded about about 2.1% per year between 2000 and 2021.[1,2] The CPI includes measures of rent, but it also adjusts for seasonal changes.[3]) Inflation and CPI both obscure a lot of ground-level realities for people--the nature of all summary statistics is that they fail to capture the totality of reality in favor of giving us a broad sense for what's going on. Anecdotally my folks moved after their rent increased by 50% when their lease expired. (That was last year.) These are obviously nontrivial increases that have dramatic impacts on people. [1]: https://www.rateinflation.com/consumer-price-index/usa-historical-cpi/ https://www.rateinflation.com/consumer-price-index/usa-histo... [2]: (270.97/172.2)*(1/22.) ≈ 1.021 [3]: https://www.forbes.com/advisor/investing/cpi-consumer-price-index/ https://www.forbes.com/advisor/investing/cpi-consumer-price-...