Tom Coburn Is An Inflation Truther

Moneybox
A blog about business and economics.
July 18 2013 12:02 PM

Tom Coburn Says Inflation Is Running at 8% A Year And He's Amazingly Wrong  

fredgraph

Earlier this morning at a hearing with Ben Bernanke, Senator Tom Coburn (R-Okla.) came out as an inflation truther, arguing that if the Bureau of Labor Statistics had stuck with 1980 methodology it would show that inflation was actually running at 8 percent per year.

Here's maybe the best way to think about this. Look above at the nominal GDP growth rate for the United States over the past 30 years. That's doing no inflation adjustment whatsoever. You'll see that unadjusted, the economy has basically never grown faster than 8 percent. So if you adjust for inflation with a belief that inflation's been running at 8 percent a year (rather than the ~4%, then ~2%, and more recently ~1.5% the official numbers show) that would mean the economy has been in a state of persistent recession ever since 1983 or so. Total American prosperity, on this view, peaked in roughly 1980 and then it's been a steady downhill slope ever since Ronald Reagan ruined everything.

Advertisement

Does Coburn really think that? Does he really think America produced more goods and services in 1983 than in 2013? Recall we're talking about aggregate output, not per capital output. There are roughly 100 million more people living in the United States today than there were at the beginning of this period.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

I Am 25. I Don’t Work at Facebook. My Doctors Want Me to Freeze My Eggs.

These Companies in Japan Are More Than 1,000 Years Old

  News & Politics
Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
  Business
Moneybox
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
  Life
Dear Prudence
Oct. 21 2014 9:18 AM Oh, Boy Prudie counsels a letter writer whose sister dresses her 4-year-old son in pink tutus.
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 21 2014 10:41 AM Taylor Swift Just Went to No. 1 on iTunes Canada With 8 Seconds of Static 
  Technology
Future Tense
Oct. 21 2014 10:43 AM Social Networking Didn’t Start at Harvard It really began at a girls’ reform school.
  Health & Science
Bad Astronomy
Oct. 21 2014 7:00 AM Watch the Moon Eat the Sun: The Partial Solar Eclipse on Thursday, Oct. 23
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.