Posted by Hemant Mehta in Courtesy of Harvard professor Niall Ferguson in Vanity Fair:
The motto “In God we trust” was added to the dollar bill in 1957. Since then its purchasing power, relative to the consumer price index, has declined by a staggering 87 percent.
That’ll make you laugh for a few seconds before you curl back up into the fetal position and get depressed again.
(Thanks to Lexi for the quotation!)
Inflation at less than 2% per annum is fine, which is what 85% over 51 years is. The quote is kind of non-statement.
All fiat currency eventually approaches its true value: zero.
How much did it decline in the previous 51/52 years?
Occasionally I think about being one of those people who crosses “In God We Trust” off my dollar bills. I never do. If I did, I would write “In My 401k I Trust” (even if I got my statement in the mail today, and ouch.)
Thanks for this factoid. It’s interesting and lends well to all kinds of thoughts.
I do it and replace it with ‘E Pluribus Unum’ – the previous national motto that roughly means ‘from many, one.’ The idea of our national motto being (in normal language) “We trust in God” is horribly wrong.
Benjdm:
In the 44 years from 1913 to 1957, the consumer price index increased roughly 3 fold (28.1/9.9). In the 44 years from 1957 to 2001, the cpi (177.1/28.1) increased roughly 6 fold, significantly higher.
CPI figures from the bureau of labor statistics: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
That wasn’t a new trend; our money has been losing value since the creation of the Federal Reserve in 1913. According to Milton Friedman, inflation is solely a monetary issue (i.e., it’s caused because the government prints too much money). This view is almost universally accepted, except by Austrian economists who add that it can also be caused by people anticipating further government fiscal irresponsibility. (Since our government has been pursuing fiscal irresponsibility rather steadily, it’s hard to say what would happen if people expected it without it really happening, so the Austrians may or may not be right.)
But it’s not because of the motto.
I cross it off and replace it with nothing. I’m becoming more and more tempted to start replacing it with “TANSTAAFL.”
I saw a church sign today with a related reference… here’s a picture
I cross out “god” and replace it with “Reason” or
“Logic” or “The People” or even “The Constitution.”
This is amusing to consider, but let’s not go off the deep end lest we give ammunition to those who insist we’re the unreasonable ones. As we all know, correlation doesn’t necessarily imply causation.
Thanks, Ubi!
just goes to show money and religion are the root of all evils
Pete, Miko, and others who say there is no change from before 1957 and after, the change is significant. From 1913 to 1957, the annual inflation rate determined by the CPA was 2.4%. From 1957 to 2001 (the same number of years), the rate was 4.3%. If I think inflation of 2% is OK, a change from 2.something to 4.something should be worrisome.
Of course, correlation does not prove causation, as mikespeir points out. That doesn’t mean it can’t be fun to point out the shift in inflation rates.
Who cares why it happened, or if it happened prior? Isn’t it funny, and sort of a slap in He face to theists, to point out that their sad pandering hasn’t been rewarded? Their god can’t save their money. It’s ironic and hilarious.
Also cross it out with a sharpie, leaving nothing behind. I have nothing against the government replacing it with something secular, but my goal isn’t to come up with the replacement. I just want that offensive statement OFF of there.
The article by Niall Ferguson, from which the quote is drawn, is actually very good. It gives historical perspective to the current economic crisis and makes a reasonable and objective attempt at describing the events that led to the recent collapse.
I would also point readers to another article by Ferguson called “Empire Falls” published in Vanity Fair in 2006 in which the author argues the decline of the West using analogies from Edward Gibbon’s The Decline and Fall of the Roman Empire.
It is a curious piece in which Ferguson contends that the decline is partially the result of the lack of religion, particularly in Europe. On the other hand, Gibbon posits that the decline of the Roman Empire was, in part, due to the rise of Christianity. Note that Ferguson’s arguments are more complicated than what I have stated and encompass more than the religious dimension.
Anyway, it is an interesting article, even if the arguments and conclusions are a bit contradictory. I don’t agree with all he says, but there is enough meat to justify a read.
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