Category Archives: Economic Commentary

The Measure of America 2008 – 2009

The Measure of America: American Human Development Report 2008–2009, the very first of its kind. It’s a human development report about the United States of America.

This report uses a Human Development Index that provides a single measure of well-being for all Americans. The disturbing results reveal huge disparities in the health, education, and living standards of different groups across the nation.

This is a fascinating book. It’s based on the United Nations Development Programme methodology for developing countries, putting a lens on ourselves to see how we measure up, using, for example, these three categories of measurement: access to knowledge, health, and livelihood.

Over the past 25 years or so, from 1980 to 2005, of the top 12 countries in the world, the United States started out as number 2, right below Switzerland, and has fallen all the way to the bottom, number 12, in 2005. It started in 1980.

So what is this concept of “human development”? Basically, the definition we use is that it’s the process of improving people’s well-being and enlarging their freedoms and opportunities. The idea draws heavily on the capabilities work of Nobel Laureate Amartya Sen and uses that as its conceptual framework. The model emphasizes the everyday experience of ordinary people. It includes the economic, social, cultural, political, and so forth, processes that shape the range of options that are available to people.

So human development is about two things. It’s about what people themselves can do to enhance their well-being and expand their opportunities. It’s also about how institutions of society constrain or expand the choices and opportunities that people have. Basically, human development is about what ordinary people can do and become.

The concept of human development is far-reaching. It includes things like political participation, personal and community security, and environmental sustainability—basically, a range of things. But the index measures just three factors. It measures education, health, and income. These three components are valued by people the world over as the building blocks of a good life and the ones that we would argue that Americans care about the most. These are the things that people are talking about around the kitchen table, that they are worried about when they are thinking of the future. They are areas where there is not too much debate around whether they are important or not. Everyone pretty much agrees that they are important.

WATCH the video presentation of this report here!

READ the transcript of the video presentation here!

Purchase a copy of  The Measure of America: American Human Development Report, 2008-2009 (A Columbia / SSRC Book) by Sarah Burd-Sharps, Kristen Lewis, Eduardo Borges Martins, and Amartya Sen (Hardcover – Jun 27, 2008) from Amazon.com

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Inflation – The People’s Enemy

Inflation – The People’s Enemy and Tool of the Expansionary State
How government deceives us about it, and robs us with it

Saturday, November 10, 2007

Jonathan Hill
America First Party Chairman

Inflation is one of those drab topics that many people do not think much about. We have all gotten accustomed to it. Prices gradually adjust upwards, and life goes on. Its gradualness is what makes it so unnoticeable. But with wage rates falling, and fuel, housing and interest costs rising, Americans are feeling the pain more acutely.

Just reflecting on what the cost of living was in the 1960s is enough to make one realize that inflation is not benign. In 1965, the cost of a new home was about $21,000, a new car averaged $2,650, a gallon of regular gas was 31 cents, a first class stamp was 5 cents, and the Dow Jones index was under 1000! Today, all these are about 10 times higher.

If you take today’s average house cost to be about $200,000, the average new car cost to be $18,000, and the average cost of a gallon of gas to be $3.00, the price increase for homes, new cars, gas, postage, and the Dow Jones over the 42 years since 1965 is 852%, 579%, 868%, 680%, and 1200%, respectively.

And yet, the government tells us that the annual percentage change in the Consumer Price Index (CPI) ranged between 1% to 13%, but remained mainly near 3% over those 42 years. At first, this seems tame. After all, that would mean that prices increased by 3% x 42 years, which is only 126%, right? Think again. To correctly calculate the price increase according to the CPI is simple. It is the percentage change in the CPI index from its January 1965 to January 2007, and this is a whopping 549%.

What does this mean for a person’s buying power and for his retirement? Let us look at a 30 year span. According to the Bureau of Labor Statistics, the purchasing power of 100,000 1977 dollars decreased by over 60% during that 30 year period. It takes $338,864.69 today to purchase the same goods that were purchased for $100,000 three decades ago.

Look at it another way. If you were to retire today, you might desire an annual retirement income of $30,000. But with an inflation rate of 3%, to retire with that real income 30 years from now, you would need an annual retirement income of $72,818! If the inflation rate were 6%, your annual retirement income would need to be $172,305 to meet the same retirement income target. Continue Reading!


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