[geeks] Well, crap ...

[Patrick Giagnocavo]

Sandwich Maker wrote:
> " From: Phil Stracchino <phil.stracchino at speakeasy.net>
> " 
> " Sheldon T. Hall wrote:
> " > Quoth Lionel Peterson ...
> " >>> From: "Kevin R. Marshall" <kevin at mpcf.com>
> " >>> If everyone made large amounts of money, it would have no 
> " >>> value.  So much for Utopia...
> " >> I said COULD, not would - I want everyone to have the ability 
> " >> to make a lot 
> " >> of money, but I agree, if everyone did, it would be 
> " >> worthless... (I thought of that after I hit send)
> " > 
> " > Actually, compared to 40 or 50 years ago, everyone _does_ make a lot of
> " > money.  At least they earn and posess a lot of units of currency, albeit
> " > currency that is worth about 10% of what it was worth back then.  That's in
> " > the USA; it's worse in some other places.
>   
There are two sides to this: 

1. purchasing power - it really doesn't matter what the units are, it 
what you can do with those currency units.  What we have in the USA is a 
"fiat currency" setup where 1 USD does not equal a set amount of an 
actual physical item; pre-FDR your dollar was backed by gold, so $35 USD 
at the time would buy 1 ounce.  I think it was LBJ who ended the $10 
bills that were backed by silver (may have been JFK, not sure).

2.  Technology increasing purchasing power - computers getting cheaper, 
yes; but also things like being able to pay $500 for an MRI and it 
taking only 1 hour instead of a $5000, invasive surgery to figure out 
what is going on.

For things that can be automated, prices in adjusted dollars are 
probably going down. For things that are largely resistant to automation 
(housing, availability of land), prices in adjusted dollars are going up 
or staying the same.


--Patrick