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Purchasing Power

According to the Consumer Price Index, how much purchasing power does one U.S. dollar have today compared to what it had in 1970?

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One dollar in 2023 has the same purchasing power as 13 cents in 1970, according to the Consumer Price Index. This means that the U.S. dollar has lost about 87% of its purchasing power over the past 53 years. The main driver of inflation is government creating and circulating more money than its economy needs. This causes the purchasing power of money to shrink and prices to increase. Governments engage in inflationary policies to effectively tax citizens at higher rates and/or to default on their national debts. Also, government regulations can have inflationary effects because they often ban people from using the most economical products and processes. Market forces can also have inflationary effects when there is a sudden increased demand for certain products/services or a shortage of them.

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