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

The World

The Budget Disaster that Sabotaged the WHO’s Response to Ebola

How Movies Like Contagion and Outbreak Distort Our Response to Real Epidemics

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

Everything You Should Know About Today’s Eclipse

An Unscientific Ranking of Really, Really Old German Beers

Education

Welcome to 13th Grade!

Some high schools are offering a fifth year. That’s a great idea.

Culturebox

The Actual World

“Mount Thoreau” and the naming of things in the wilderness.

Want Kids to Delay Sex? Let Planned Parenthood Teach Them Sex Ed.

Can Democratic Sen. Mary Landrieu Pull Off One More Louisiana Miracle?

  News & Politics
Politics
Oct. 22 2014 9:42 PM Landslide Landrieu Can the Louisiana Democrat use the powers of incumbency to save herself one more time?
  Business
Moneybox
Oct. 23 2014 11:51 AM It Seems No One Is Rich or Happy: I Looked
  Life
The Vault
Oct. 23 2014 12:02 PM Delightfully Awkward Studio Action Shots of Players, Used on Early Baseball Cards
  Double X
The XX Factor
Oct. 23 2014 11:33 AM Watch Little Princesses Curse for the Feminist Cause
  Slate Plus
Working
Oct. 23 2014 11:28 AM Slate’s Working Podcast: Episode 2 Transcript Read what David Plotz asked Dr. Meri Kolbrener about her workday.
  Arts
Brow Beat
Oct. 23 2014 12:01 PM Who Is Constantine, and Should You Watch His New Show?
  Technology
Technology
Oct. 23 2014 11:45 AM The United States of Reddit  How social media is redrawing our borders. 
  Health & Science
Bad Astronomy
Oct. 23 2014 7:30 AM Our Solar System and Galaxy … Seen by an Astronaut
  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.