Looking at our nation’s deficit spending, I got thinking back to the Carter years, the high inflation and the high interest. Then I decided to grab a table or a chart to see how things looked from a historical perspective. This chart give inflation figures from 1914:
It turns out that our highest inflation was under Woodrow Wilson. 20.44% in 1918 – 18.1% in 1917, and 12.62% in 1916. Back then we were on the gold standard – yet the price of gold remained at $20.67 from 1910 through the twenties. During the worst years of the great depression, inflation (deflation?) was about -10%.
Carter’s highest year – 1979 – saw 13.29% inflation . . . and to be fair, Carter inherited a good portion of his challenges from Nixon – whose highest (and final) year was 1974 at 12.34% inflation. Trump’s last year, 2020, had only 1.34% inflation. Biden’s at 4.31% on this chart, and we’re not through 2021 yet. Still, it will be a challenge to top Woodrow Wilson.
Above the chart is this statement “Interactive chart showing the annual rate of inflation in the United States as measured by the Consumer Price Index back to 1914. The current rate of U.S. CPI inflation as of August 2021 is 271.70.” As I write this, the net tells me that I can buy gold for as low as $1827 per ounce. Dividing that by $20.67 shows that the price of gold has only increased by a factor of 88.39.
C.P. Snow described the second law of thermodynamics as “You can’t win, you can’t break even, and you can’t quit the game.” Who says physics can’t be applied to government?