Just about everyone recognizes that inflation exists, because they are cognizant that the price of goods and services that they purchase, rent, or use have gone up in price, which is essentially what inflation represents –the increase in the price of goods and thereby the corresponding decrease in the purchasing power of the dollar. So too, we find that it seems as if each year more and more millionaires are minted, of which, books are written such as “The Millionaire Next Door,” but, what isn't talked about so much is the fact that a million dollars simply isn't what it once was, so then those that are millionaires but aren't filling all that secure about their status, and certainly don't feel wealthy or rich, have a very valid point because when we look at the value of $100,000 back in 1964, we find that because of inflation as calculated by the website in2013.dollars.com, that in 2024 we would need $1,015,471 to match the purchasing value of $100,000 in 1964. Therefore, a millionaire back in 1964, would certainly feel rich, because the average price of a home in the United States was just $18,900, and further to the point, one million dollars in 1964, if it kept pace with inflation, would be the equivalency of $10,154,709 today.
When it comes to the impact of inflation, not all is equal, for there are going to be winners and losers, of which, not too surprisingly the biggest losers are represented by people that don't have any real savings, that don't therefore own a home, and typically are having to make debt payments on their vehicle and other goods– signifying that these people therefore have to pay ever higher amounts of money for rent, for groceries, for insurance, and for their car note, without necessarily having an income which has kept up with inflation, and in many a case, falls way short of. Additionally, because the American tax system is progressive in nature, they are subject therefore to having to pay higher taxes, despite the fact that their purchasing power because of inflation, has declined. So too, inflation for many a person, just makes it more difficult for them to stay on top of their bills, because these bills are constantly climbing, yet their income is not typically increasing enough to meet those higher debts. Indeed, we have to recognize that salary reviews for many an employee, is only once a year, which signifies when inflation is persistent, that this is detrimental to those that have to wait at least a year to get a possible raise, which may or may not even keep pace with inflation.
It also has to be said that when it comes to inflation, the government has all sorts of ways to calculate such, and then to state what the government claims the inflation rate is, which seems tor the most part, to understate the real inflation rate, especially for those of middle and lower income. The bottom line is that inflation is so insidious because it hurts most those that are the most vulnerable, that thereby don't typically have any assets that are appreciating, because they are asset poor, and therefore they have to pay the piper, at an ever higher price, made worse because the governance of this nation doesn't mind inflation, because it serves as a stealth tax on those that are the most disenfranchised and thereby keeps them in their place.