Is the Cost of Living Really Rising?

According to Prof. Steve Horwitz, one contemporary economic myth is that the cost of living has consistently risen for Americans over the past century. In fact, prices are higher today than they were 100 years ago. However, prices today have been heavily influenced by inflation. One way of avoiding inflationary distortions is to look at amount of labor hours required to make a purchase. Using this analysis, Prof. Horwitz finds that most goods and services have never been cheaper.

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[Cfli731]

There are some merits to what he said, after all, the fall in prices for the goods that he had mentioned are in fact the result of the competitive market.

However, I think he failed to cover the complete picture by:

1. Not addressing the two largest sources of debt an average American face, which is mortgage and student loans.

2. Not providing a complete portfolio of what an average American house hold actually spends as part of the cost of living.

[MegaAstrodude]

Forget your chickens. Compare it to education and healthcare to prove that the cost has risen tremendously.

[Cashstock Moneybags]

Do you at least have a rate under 4%? The higher the price, the faster the house will build equity, so a more expensive house isn't necessarily bad... assuming you can afford it. In my city (Green Bay, WI) homes vary in price from $30K fixer-uppers to $300K riverside houses. Like all products, you get what you pay for. My first house was a $70K deathtrap fire hazard that was being contested for ownership by mice and roaches. It fetched a nice return, but not until after way too much work.

[albatrossforlife]

Already did that. I just live in a more expensive area. I wish I was fortunate enough to live in an area where the 80-120k homes are the norm.

[Cashstock Moneybags]

Buying a house as soon as possible is wise. Forego food an cell phone if you must, but save and buy. The Fed activity is going to blow up in everyone's face, but its foolish to let opportunity pass you by just because of the moral hazard. Interest rates can't be this low, so they won't be ever again. Housing prices aren't going down anymore either, so the time to buy is yesterday, but today isn't too late. If you buy soon enough, you might be able to refi and put your student debt at 3-4%.

[MegaAstrodude]

Why is silver better than gold?

[Jack Viper]

Buy silver it will protect you from inflation and hyperinflation!

[christo930]

Rising prices ARE a symptom of inflation (that has been my point all along and that falling prices can be a symptom of deflation, but can fall for other reasons and that deflation, a contraction of the total money supply is a bad thing), but it's not like inflation is evenly distributed.

[007brendan007]

I'm not really sure what side you're arguing for or even what your point is. I'm not talking about hypothetical what-ifs, like "what if there was deflation, they he could earn less." There isn't deflation, that's a contrived complexity.

Inflation is easy to measure, it's simply the increase in the money supply. The FED publishes that on a regular basis. Rising prices are a symptom of inflation.