Social Security Benefits Could Get Their Biggest Boost in 40 Years.

[Finance Dave]

Your post is an example of how people adjust and substitute as a result of inflation. You have been impacted, as your post shows:
1) Refinanced the mortgage. That is awesome, but an activity that is unrelate to inflation. (And an activity that no longer makes sense for most mortgages today as refinance rates are much much higher). That is, it was the proper decision regardless of the change in prices (i.e. inflation). It also is an example of an economic activity that has been severely curtailed - many of those folks processing refinances have either or will find themselves out of a job.
2) "DH switched where he got his hair cut" - this is an example of substitution to a cheaper/lesser quality good/service. If you would say "But the haircut is just as good", then why didn't he do the switch before. So there was either a reason he used the previous place (quality of haircut, pleasantness of the place, closeness to home, attractive hair-cutter, whatever) or it was just not important enough to change, and inflation (in general) was enough to get him/you to look at expenses carefully to see what could be substituted "easily".
3)"we dropped local TV channels" - another example of traditional economic behavior of a normal good when prices increase (or even stay the same but prices increase on other goods). You are in fact going with less here. Now you may argue "we didn't watch them" or "we don't miss them" which is good, but the fact remains the same that you are decreasing purchasing due to inflation.
4)"dropped some museum and park passes we weren't using too much" - similar situation with #3
5)"cut my own hair and stopped having it dyed" - again, similar to #2. Again, you are substituting your own labor/time to do your hair vs. the pleasure? of having it done in a salon. Once more, I am not saying this is bad - perhaps you've like it better and get more satisfaction. All I am stating is that this is an example, similar to "I make my own coffee at home instead of going to Starbucks".

These kinds of changes are going on all throughout the economy. That hair stylist(s) that used to get your big $ and hubbies $ now doesn't get those. That has impacted their possible earnings, and their spending will need to be reduced. The local TV companies get less money (less $ from cable or local advertisers). And so on.

None of what I'm babbling on here is in anyway meant to dissuade you or others from doing these things - they are natural reactions to higher prices. All that I am stating is that even in these cases, inflation has had an impact on behaviors and those behavior changes impact the economy.

+100, but you’ll never convince some people, so ….

 

[jldavid47]

I'm not sure what your point is. I posted that our personal inflation rate goes down year to year and nothing in your post changes that.

Except what you posted was your personal spending rate, not your personal inflation rate.

They are not the same thing. (As explained in a previous post)

 

[Koolau]

Only if you spend like an ultimate consumer (What stuff?). Our food bills have been pretty stable over the last year, utilities have really only gone up a little, and our RE Taxes are down a little, at least for us. Honestly, it has made no or very little difference in our standard of living.

I suppose I would agree that current inflation has made little difference in our standard of living - except where we have self-imposed limits on ourselves. IOW, we have changed our buying habits to lower our total spend (substituting and even forgoing things.) We really didn't have to make those "sacrifices" but old habits die hard. Having said that, a lot of folks - those just making it before - are suffering the most. Imagine pay-check-to-pay-check living and now you are short one pay-check per year (in effect.)

For us, I think like Time2. One million in my accounts is actually only worth $910,000 - and it will never come back, based on subsiding inflation. Hopefully future investment results will increase the actual NUMBER but the value per dollar is already 9% lower and that won't change (except to get worse as we go.) Dreary, isn't it.

 

[Koolau]

That is a good point, but there are tons of ways which people get around inflation without true decrease in quality/quantity. We switched cable providers, phone providers, insurance companies, etc. The type of things where you get better deals as new customers than existing and get different but equivalent.

It did cause us to cancel unused subscriptions, when everything is great, you might just let it slide a few extra months just in case because well its not that much money.

Our personal inflation rate is relatively low but where we are people have been holding off raising rates for a long time and it was like Aug/Sept someone said, ok, its time and everything spiked like 25% across the board.

The local produce stand had a bag of produce for $20 for 10 years now, it just went up to $25. Three local causal fast foods just raised rates for the first time...some only got raised if you use the app, but some did it across the board. Our utilities are locked in right now by the city and they won't approve another hike until end of year so expecting that to suddenly jump.

I told my honey its finally caught up to us when we went into Aldi's last week and their cheap wine finally went up from $2.95 to $3.45 for the first time in as long as I could remember. Now that is inflation getting out of control.

Heh, heh, time to make your own wine!

 

[Koolau]

Have you optimized all your spending? Possible, but not probable. Most of us don't.

So, you're saying "inflation is a GOOD thing. It reminds us to optimize our spending." (Just kidding. But it's true in our case that we do reevaluate stuff when prices rise. Having said that, we find ourselves, in most cases, "settling" for a somewhat inferior product to save money.)

What I have found is that for the first few months of "inflation" we don't notice much. Then we begin to substitute. Then we realize that inflation really IS causing us turmoil, even though we're part of the fortunate few who can spend more. But we try not to, so it DOES affect us. Hope I'm making sense. YMMV

 

[Koolau]

Well yes, but we are highly unlikely to have 9% inflation for 8 years in a row.

Yeah, it could go up! (Resident glass-half-empty-guy reporting in - see what I did there?) I recall back in the 70s/80s thinking. This has to end soon - but it didn't. That was a period when we would go to a store to buy our favorite "whatever" every couple of weeks and the price would have gone up - every time. It was actually frightening. Just waiting for the WIN (whip inflation now) buttons to be reissued. YMMV

 

[daylatedollarshort]

Except what you posted was your personal spending rate, not your personal inflation rate. They are not the same thing. (As explained in a previous post)

It just seems like some posters here have a hard time believing that some of us retired folks just don't see much personal inflation, which does not make any sense to me based on the examples several of us have posted in this thread, but certainly your choice to believe what you want. Pretty clearly those of us with low personal inflation rates have similar reasons to those described in the Fidelity article in the link below.

https://www.fidelity.com/learning-center/personal-finance/personal-inflation-rate. Me-flation: Why knowing your personal inflation rate matters: "Ted owns his tiny but expensive New York apartment, takes the subway to work and orders an embarrassing amount of take-out. His personal inflation rate is likely lower than average because his housing cost is relatively fixed and other categories where he spends a lot of money have lower rates of inflation....Ted's me-flation rate is lower than average because he:

• Owns a home, which insulates him from rising rent and property prices.
• Uses public transportation, so he hasn't had to buy a car or fill its tank.
• Eats out a lot, because the inflation rate for food away from home has risen more slowly than food at home.

In the short term, if you want to trim your personal inflation rate in a meaningful way, try focusing on the areas that are driving inflation the most today: energy, housing, and food."

 

[copyright1997reloaded]

+100, but you’ll never convince some people, so ….

Yep, I give up.

Except what you posted was your personal spending rate, not your personal inflation rate.

They are not the same thing. (As explained in a previous post)

yep.

ETA: I did post again, but will refrain from any further discussion on this. Looking forward to my COLA, may they all be 8% because the US economy will be in great shape with a bunch of high inflation years!

 

[daylatedollarshort]

Have you optimized all your spending? Possible, but not probable. Most of us don't.

Not yet, but I'm always working on it. I have always liked the idea of living sustainably and off grid as much as we can.

 

[copyright1997reloaded]

It just seems like some posters here have a hard time believing that some of us retired folks just don't see much personal inflation, which does not make any sense to me based on the examples several of us have posted in this thread, but certainly your choice to believe what you want. Pretty clearly those of us with low personal inflation rates have similar reasons to those described in the Fidelity article in the link below.

https://www.fidelity.com/learning-center/personal-finance/personal-inflation-rate. Me-flation: Why knowing your personal inflation rate matters: "Ted owns his tiny but expensive New York apartment, takes the subway to work and orders an embarrassing amount of take-out. His personal inflation rate is likely lower than average because his housing cost is relatively fixed and other categories where he spends a lot of money have lower rates of inflation....Ted's me-flation rate is lower than average because he:

• Owns a home, which insulates him from rising rent and property prices.
• Uses public transportation, so he hasn't had to buy a car or fill its tank.
• Eats out a lot, because the inflation rate for food away from home has risen more slowly than food at home.

In the short term, if you want to trim your personal inflation rate in a meaningful way, try focusing on the areas that are driving inflation the most today: energy, housing, and food."

The part that you are having trouble understanding/believing is the difference between what the article is discussing: "Ted me-flation is lower than average" because his existing spending categories are areas with lowered inflation vs. average and what YOU YOURSELF described as CHANGES you have made in your spending. You may indeed be not seeing much personal inflation. But the only way to validate that is to compare like to like.

You are comparing apples with oranges.

The article *mostly* keeps this straight, but does start to stray into trouble when it is discussing things like "Luisa won't have to buy another car for a while, so that will bring her me-flation rate down next year." What is really happing is that Luisa, by not having to buy another car for a while is changing her spending. If Luisa normally buys a new car every year but instead buys one every four years, she is changing her spending as a result of inflation (either in the price of a new car or because of being squeezed in terms of other expenses, or both).

But, enough. You are good to go and inflation will never impact you.

As Running_Man states on his signature:
But then what do I really know?

Signed, Econ Major w/Honors Degree in Economics, Phi Beta Kappa.

 

[Major Tom]

Yeah, it could go up! (Resident glass-half-empty-guy reporting in - see what I did there?) I recall back in the 70s/80s thinking. This has to end soon - but it didn't. That was a period when we would go to a store to buy our favorite "whatever" every couple of weeks and the price would have gone up - every time. It was actually frightening. Just waiting for the WIN (whip inflation now) buttons to be reissued. YMMV

I was about to gently push back on your example of the 70's Koolau, as there were a few years (76, 77, and 78) in which the inflation rate was a little lower (5.8, 6.5, and 7.6 respectively). However, I see that the years 79, 80, and 81 had inflation rates of 11.3, 13.5, and 10.3 respectively. For the period from 1974 - 1981 inclusive, the average inflation rate was 9.38%.

Fair point!

https://www.usinflationcalculator.com/inflation/historical-inflation-rates/

 

[daylatedollarshort]

The part that you are having trouble understanding/believing is the difference between what the article is discussing: "Ted me-flation is lower than average" because his existing spending categories are areas with lowered inflation vs. average and what YOU YOURSELF described as CHANGES you have made in your spending. You may indeed be not seeing much personal inflation. But the only way to validate that is to compare like to like.

You are comparing apples with oranges.

The article *mostly* keeps this straight, but does start to stray into trouble when it is discussing things like "Luisa won't have to buy another car for a while, so that will bring her me-flation rate down next year." What is really happing is that Luisa, by not having to buy another car for a while is changing her spending. If Luisa normally buys a new car every year but instead buys one every four years, she is changing her spending as a result of inflation (either in the price of a new car or because of being squeezed in terms of other expenses, or both).

But, enough. You are good to go and inflation will never impact you.

As Running_Man states on his signature:
But then what do I really know?

Signed, Econ Major w/Honors Degree in Economics, Phi Beta Kappa.

Inflation does impact me. I come out ahead with it, especially with a low interest rate, fixed mortgage. It is basic math per my previous example. My inflation adjusted income is much greater than my expenses subject to inflation, even without making any further expense reductions. The extra cuts are just icing on the cake. To alter my previous example to take out the current year's expense cuts, if one has $100K inflation adjustable income and $50K in expenses subject to inflation, with 10% inflation in one year, income increases by $10K and expenses only $5K for a net gain of $5K. This is why many of us here are excited by next year's SS increases.

We have one poster here with a $500K mortgage at 2.5%. If he had that money invested in TIPS and I-bonds, even with a 0% real yield, and 10% inflation, he would make $37,500 on the difference (before taxes).


ETA: And if the poster with the $500K loan has a $1M house in an area where prices tend to rise with inflation, then 10% inflation may add another $100K to their home value / net worth, on top of the $37,500 from the mortgage investing differential. And the $37,500 from investing the mortgage money can be invested in TIPS and I Bonds for even more inflation adjusted future income.

 

[Gumby]

So, you're saying "inflation is a GOOD thing. It reminds us to optimize our spending." (Just kidding. But it's true in our case that we do reevaluate stuff when prices rise. Having said that, we find ourselves, in most cases, "settling" for a somewhat inferior product to save money.)

What I have found is that for the first few months of "inflation" we don't notice much. Then we begin to substitute. Then we realize that inflation really IS causing us turmoil, even though we're part of the fortunate few who can spend more. But we try not to, so it DOES affect us. Hope I'm making sense. YMMV

Oh, I agree with the substitution effect. I would just be reluctant to criticize others for not having optimized their spending when I haven't done so myself.

 

[aja8888]

The only true way you beat inflation is your earnings go up a higher percentage than the inflation rate. When I was a Plant Manager in a large manufacturing plant in CT in 1980, I remember giving out 17% annual increases to my staff. Inflation at that time was lower on an annual percentage basis.

Now if you lower your spending on goods and services while inflation ravages the cost of those goods and services, that's optimizing or reducing your spending through replacement. Two different things.

 

[daylatedollarshort]

Many of us here have lived during high inflation years and came out fine. For the most part interest rates were also high, stocks went up over time and salaries kept pace for those in high demand fields. The only people really hurt by inflation were those on fixed incomes, like non-COLA pensions not offset with fixed expenses, and those in lower demand fields where the salaries didn't keep up with the price increases. People still bought and sold houses. Our first mortgage was 12%.

What is hurting investors now is real interest rates are pretty low, combined with stocks dropping, but the Fed is working on fixing the real interest rate part and stocks usually bounce back eventually. If inflation was 10% but interest rates were 15%, those with money to invest could be making a 5% real return on fixed income.

 

[jldavid47]

It just seems like some posters here have a hard time believing that some of us retired folks just don't see much personal inflation...

You obviously have no understanding of what I wrote so I give up. You clearly do not understand the difference between spending rates and inflation rates. Go live in your "Inflation hasn't affected me" fantasy world because as soon as you change your spending habits to accommodate higher prices, inflation has affected you.

 

[11522914]

The part that you are having trouble understanding/believing is the difference between what the article is discussing: "Ted me-flation is lower than average" because his existing spending categories are areas with lowered inflation vs. average and what YOU YOURSELF described as CHANGES you have made in your spending. You may indeed be not seeing much personal inflation. But the only way to validate that is to compare like to like.

You are comparing apples with oranges.

The article *mostly* keeps this straight, but does start to stray into trouble when it is discussing things like "Luisa won't have to buy another car for a while, so that will bring her me-flation rate down next year." What is really happing is that Luisa, by not having to buy another car for a while is changing her spending. If Luisa normally buys a new car every year but instead buys one every four years, she is changing her spending as a result of inflation (either in the price of a new car or because of being squeezed in terms of other expenses, or both).

But, enough. You are good to go and inflation will never impact you.

As Running_Man states on his signature:
But then what do I really know?

Signed, Econ Major w/Honors Degree in Economics, Phi Beta Kappa.

For some reason I can't seem to grasp this. For example:

Person A - On Oct 1st has $100 they normally spend on groceries. On Oct 31 Person A bought brand name products and they had to spend $110. Person A has 10% inflation. The next 30 days Person A had to spend $112 so inflation over 2 months is now 12%.

Person B - On Oct 1st has $100 to spend on groceries. Person B buys the exact same items as Person A but decides to wait for sales, finds coupons to purchase their items. On Oct 31 Person B spent $90, therefore reducing their costs by $10. The next 30 days Person B had to spend after sales and coupons $93 so inflation did impact them.

It seems that Person B was able to reduce their personal inflation rate by using strategies Person A doesn't care about. How is that not reducing their personal inflation rate when they both end up purchasing the same exact products?

Another quick real life example. I got a 20% off coupon from Amazon. Most people pay $16 a month for Netflix and they recently increased their rates. I buy a Netflix gift card using the 20% off coupon. I just reduced my costs by 20%. Wouldn't that affect my personal inflation rate?

 

[SecondCor521]

^^

I think that when BLS does inflation calculations, they take the regular, non-sales, non-couponed price. I also don't think they try to account for any extra effort taken with respect to timing - there is an inconvenience to Person B to have to wait, but maybe Person B doesn't care so they may not agree that their quality of life has been impacted.

"How is that not reducing their personal inflation rate?" - It reduces their spending rate, but they had to work more to achieve it. You can look at it this way: Person B has essentially taken on a part time gig clipping coupons and effectively getting paid $10 or $7 a month or whatever. They might enjoy it more than other people do, so they might be willing to work for such low wages (especially considering that the wages are after tax). But it's still work and effort on their part that they are expending now that they didn't before.

Suppose I hired Person A to babysit my cat for $20 (which happens to be $110 - $90) in October and then paid them $19 (which happens to be $112 - $93) in November. Person A might say to themselves, "Well, that's fun, the cat is nice, and I like cats, and I'll just surf the web anyways, and SecondCor just lives right around the corner so it's no big deal." Suppose they choose not to report that income on their taxes (mild tax evasion, but common). They mentally say "Ah, for convenience sake I'll just put that cash in my grocery money envelope." Then economically they're in the same boat as Person B. But Person A worked (an easy job) and increased their income to achieve this effect. They were still affected by 10%/12% inflation.

Inflation is an increase in prices for like quality good over time. Changes in income and expenses can occur at the same time and confound things. Because if income, expenses, and inflation are all changing simultaneously, a person's cash flow might increase, decrease, or stay the same. Add changing asset prices on top of that, and a person's net worth can also increase, decrease, or stay the same. So there are multiple things going on which makes it complex.

 

[11522914]

^^

I think that when BLS does inflation calculations, they take the regular, non-sales, non-couponed price. I also don't think they try to account for any extra effort taken with respect to timing - there is an inconvenience to Person B to have to wait, but maybe Person B doesn't care so they may not agree that their quality of life has been impacted.

"How is that not reducing their personal inflation rate?" - It reduces their spending rate, but they had to work more to achieve it. You can look at it this way: Person B has essentially taken on a part time gig clipping coupons and effectively getting paid $10 or $7 a month or whatever. They might enjoy it more than other people do, so they might be willing to work for such low wages (especially considering that the wages are after tax). But it's still work and effort on their part that they are expending now that they didn't before.

Suppose I hired Person A to babysit my cat for $20 (which happens to be $110 - $90) in October and then paid them $19 (which happens to be $112 - $93) in November. Person A might say to themselves, "Well, that's fun, the cat is nice, and I like cats, and I'll just surf the web anyways, and SecondCor just lives right around the corner so it's no big deal." Suppose they choose not to report that income on their taxes (mild tax evasion, but common). They mentally say "Ah, for convenience sake I'll just put that cash in my grocery money envelope." Then economically they're in the same boat as Person B. But Person A worked (an easy job) and increased their income to achieve this effect. They were still affected by 10%/12% inflation.

Inflation is an increase in prices for like quality good over time. Changes in income and expenses can occur at the same time and confound things. Because if income, expenses, and inflation are all changing simultaneously, a person's cash flow might increase, decrease, or stay the same. Add changing asset prices on top of that, and a person's net worth can also increase, decrease, or stay the same. So there are multiple things going on which makes it complex.

Thanks for the response.

Using my Netflix real life example I was able to save $20 on $100 spend which by the way took 15 minutes total - $80 per hour. So if Netflix was my only monthly expense and I reduced it using the coupon you're saying that this did not change my personal inflation rate as compared to another paying full freight. I'm paying the higher Netflix bill due to their increase in costs but because of my effort reduced my spending which then lowered my Netflix cost.

But regardless of how inflation is calculated, regardless of the effort I put into this, others are paying 5% more due to Netflix's increase and I reduced my spending ~15% using the coupon.

Okay so my inflation rate didn't change but I now have ~15% more money to spend on other things. That is just fine with me

 

[DJRR]

I know everyone understands inflation. It is another area of theory vs. practice. You can spout all the theory, but it won't matter to someone who has their own practice.

Why would I care what the BLS equivalent rent increase is if I personally have a fixed rate mortgage and property tax is limited by legislation? In theory I know it hurts people who are not in my situation, but in practice it does not really matter to me unless we are saying that society is going to break down.

I bought steak yesterday for 50% off since it was going to expire today. It tasted great and was cheaper than the regular price last year Since meat is more expensive there are more leftovers and sales since people do not want to pay $12 per pound. So has my inflation gone up or down?

Black beans are $.69 a can, pasta is < $1 and pasta sauce is $1 a jar. These are all less than they were 2 years ago so it is not true to say that everything is higher. People can substitute if they want to, which is not a bad thing.

The BLS says that hedonic inflation is a real thing. The product is more expensive but has more features so magically 0 inflation. Anyone who uses Excel knows this can be BS. Again theory vs. practice.

I got a 20% raise this year. My SIL got a 50% raise. Something is going on in the labor market that we don't really understand yet. There is a structural change in participation. Theory is having a hard time dealing with it, but in practice I am very satisfied. I realize that others are not as fortunate.

Which is not to say that inflation is good, just that not everyone will have the same view on the theory. If we end up as the Weimar Republic then OK, but don't think we are anywhere close to that.

 

[daylatedollarshort]

You obviously have no understanding of what I wrote so I give up. You clearly do not understand the difference between spending rates and inflation rates. Go live in your "Inflation hasn't affected me" fantasy world because as soon as you change your spending habits to accommodate higher prices, inflation has affected you.

Think about it this way, to use another example, does inflation hurt Warren Buffet? Is his lifestyle crimped because gas went up $1 a gallon, eggs went up a $1 a carton and his Medicare payments increased by $20 a month? Inflation does not impact us all equally.

I've showed the math in multiple examples now of how one, even those of us who are not billionaires, can come out ahead with high inflation. If I don't understand where I'm wrong, then instead of hurling vague insults, please show me the error in my math examples. Inflation does impact me, but in a good way because my inflation adjusted income (TIPS and SS) is higher than my spending on expenses subject to inflation (fixed rate mortgage, capped property taxes, 1/2 tank a gas a month, and stuff on Freecycle is still free). I have more net income when inflation is high, and a higher home value, at least in the long run, because I own a house in a HCOL area where home prices tend to at least keep up with inflation.

 

[daylatedollarshort]

This is a related article that explains the situation some of the posters here are in:

Here's one group of homeowners who may be benefiting from high inflation - MarketWatch: Gas, goods, and groceries have become more expensive. But some homeowners may actually benefit from rising costs: "The government’s inflation numbers confirmed that the price of literally everything has gone up. But an economist said that there’s one group who actually may have benefitted from rising costs.

Inflation may be at a 41-year high of 9.1% in June, thanks to rising gas and food prices, but asset holders such as homeowners who have locked in a fixed-rate mortgage may actually benefit from home price appreciation...“It’s not a good thing for everyone,” Wolfers told MarketWatch in an interview. “The claim is that some people benefit from inflation....It’s Econ 101, Wolfers said: If debt is valued at $X right now, when inflation rises, the money you owe doesn’t go up to $X+1, even if your wages go up; it remains at $X. (Provided that the interest rate is not adjusted, based on inflation.)

Consider a homeowner who locked in a 30-year fixed-rate mortgage at 3%. While the price of their car, gas, electricity, and other expenses go up, that homeowner will also see their home value rise with inflation. Yet their mortgage rate remains the same as it is not inflation adjusted, which means they’re still paying the same rate that they were pre-inflation.

“For many families, this is tens of thousands of dollars” saved, Wolfers said.

So when inflation rises by 9.1%, the home you own is probably worth more in value too, but you still owe the same amount you did before prices rose."

The caveat in the article is that one has to have wages go up with inflation as well to see the full benefit. But for those with SS, COLA pensions, TIPS and I bonds, like many here, income does go up with CPI inflation.

 

[Koolau]

Oh, I agree with the substitution effect. I would just be reluctant to criticize others for not having optimized their spending when I haven't done so myself.

I agree. Don't think I criticized anyone - if so, it wasn't intended and, if so, I apologize - I'm no authority and do not have a lock on the "truth" about how to live. I may have shared what I have done, but I don't expect others to do the same. Don't even expect others to agree with me.

The funny thing is that I am now (and I suspect many of us are now) able to "ignore" inflation if we want to. We can buy whatever we want (BTD) and go on with our FIRE existence. BUT many of us are still prisoners of our old LBYM existence. That dies hard. One of the reasons we were able to FIRE is that we did watch the pennies and adjust for inflation. Now, it's difficult to change our ways - at least it is for me. YMMV

 

[Chuckanut]

In the period 1973 through 1981 inflation averaged a little above 9% per year. 9.2% per year by my calculation. OK, that took nine years.

It's happened in the lifetime of many of us. I hope it is unlikely to happen again, but then back in the late 70's and 80's I didn't think double digit inflation would happen either.

According to one inflation calculator what cost $1 in 1973 cost $2.05 by the end of 1981. The value of the dollar cut in half in nine years.

 

[Koolau]

In the period 1973 through 1981 inflation averaged a little above 9% per year. 9.2% per year by my calculation. OK, that took nine years.

It's happened in the lifetime of many of us. I hope it is unlikely to happen again, but then back in the late 70's and 80's I didn't think double digit inflation would happen either.

According to one inflation calculator what cost $1 in 1973 cost $2.05 by the end of 1981. The value of the dollar cut in half in nine years.

Heh, heh, and me sitting here with my un-COLA'd pension. Bummer!