Is the Cost of Living Really Rising?

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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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• capitalism
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[Reason1600]

The video is correct. This is the reason that people are living longer today, have more leisure time to watch youtube, and have more disposable income to buy things like computers, cell phones, microwaves, color TVs, DVD players, and washing machines. The cost of gasoline with respect to gold has remained flat, and regulations make it harder and more costly to produce. Health care is better now, and the government pays for half of all health care, which artificially inflates the price.

[MrHamncheez]

@GabrielBacon he was giving examples. Housing is much cheaper than it used to be. Healthcare is more expensive, this is true. However, this is because of technological improvements. If you get a good bout of cancer, $200,000 is not unreasonable for your bill. Thats as much as a house in some areas! However, how much would cancer treatment cost in 1980? It would cost nothing, because there was no treatment at all, and you would be dead.

[rockinthisnecropolis]

Don't EVER compare "top of the line audio equipment" with iPods. They don't even come equipped with a bloody EQ. I've seen modern top-of-the-line home stereos costing somewhere in excess of $20,000. Not including the records, installation of full range speakers, power/preamp tubes... and so on. How does this factor in?

[jonescomplete]

@MrHamncheez LOL

[brewerscrew]

@Reason1600 I would agree if we lived in a free market, but we don't. We have minimum wages. He says we should compare standard of living based on average amount of labor hours to purchase a good. By that logic we could simply raise minimum wage to 1,000,000 / hour then our standard of living should skyrocket, but we know that isn't the case. It's a good comparison, but not in the society that we live in today.

[cadehalada]

Of course things are getting better, the real question is how much better would things be if society was not paying economic rent in the form of interest for every dollar they get? Private banks have a monopoly on money creation.

[LIW770]

What about real estate?

[MrDrusev]

@MrHamncheez I'd also mention that getting a secure job right now (except working for the fed or government) is a myth. There is no such thing, people get fired and switch jobs all the time. Also, another point is that most Americans (not trying to be picky, just an example) live on credit. People simply use money they don't have. That is wrong, preposterous and very unusual for most EU countries or Japan. I'm talking about daily expenses, not start ups or house/car credit. Ergo, debt growth.

[MrDrusev]

@MrHamncheez I'm afraid you're missing my points,no offense.There are simply a lot of people in the planet and in order to get what you really want, you need to do 10 times as much work as the generation before, which costs a lot more than 10 times the money that generation payed for education.Moreover, I do agree that the presently people with less than standard income are mostly students, imagine how difficult it would be for a student, who has plans, but his/her parents struggle financially.

[HouseofVespucci]

@MrHamncheez Well if those "poor peasants" start figuring out those electronics like their peers to hack hopefully they wont use the other clear evidence of gains from coercion like during the opium wars.

[HedgehogRebellion]

@MrTunaOnRye: Im sure back in the Great Depression people bought newer items when they could afford to...does that mean the economy was on fire? Buddy, you have an Economics degree I gather. But Ive known a lot of educated men who could not argue very well bcuz they never STOPPED TO TRY And DISPROVE THEIR OPINIONS before THEY TRY TO ASSERT THEM. Read Sir Karl Popper, he was a revolutionary in the field of Microbiology. He redefined scientific methodolgy.

[MrHamncheez]

@MrDrusev Getting a job now is easier than its ever been. Education is more expensive, but the payoff is much, much higher than the increased cost. Also, increases in efficiency, supply and technology are great things, not "21st century problems"