April 13, 2010

What a Dollar Buys Now and Then: Cool Online Tool Showing Decline of Dollar's Power

Over at CoinNews.net, they have a cool online gadget that is based upon the federal government's Consumer Price Index. You input YEAR, PRICE OF ITEM, and SECOND YEAR, and the gizmo tells you how much the same item would cost in the second year, compared to the first -- and it gives you the rate of inflation.  They call it their "Inflation Calculator."  

Examples:

If you bought a book for $18.00 in 1990, today it would cost $29.95, for an inflation rate of 65.8%.

If you bought a car for 20,000 in 1985, today it would cost $40,286.43, for an inflation rate of 101.4%.

For those of us that have been around awhile, this sounds about right.  The price I paid for a Lexus in the 1980s isn't gonna get me in the dealership door.  What I paid around $25K for back then, I'd have to walk into North Park Lexus with around $50K today. 

And, I think back to McDonald's visits growing up. I remember the little hamburger costing only 25 cents.  You could get one for a quarter, and maybe some pennies for tax.  I think the little basic burger is now 89 cents, but I'll have to double check this and get back to you, Dear Reader, the next time I drive thru McD's (which is rare, so bear with me.) 

For the detailed report on the Consumer Price Index by the Bureau of Labor Statistics, you can read their periodic reports in .pdf format.

Image: US Twenty Dollar Bills, Wikimedia Commons Public Domain.

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