"Harry Krause" wrote in message
...
RG wrote:
74 cents a gallon? Wow!
When considering inflation, the 1976 USD was worth $.27 to a 2006 USD.

A $.39 increase/gallon in 1976 in today's USD's converts to a $1.44
increase.

And you were saying?


Let's focus on what you're saying, or at least making an attempt to say.
You either don't understand the concept of reduced purchasing power due
to inflation, or have difficulty explaining it. A 1976 dollar was worth
more in terms of purchasing power than a 2006 dollar. The exact opposite
of the way you stated it.

The Consumer Price Index was established in 1967, which shall be referred
to as the base year. The CPI index for the base year is 100. The value
of the index as of March 31, 2006 is 578.86, the latest statistic
available. The index value for 1976, the year of comparison in this
thread, is 170.5.

This means that a 2006 dollar is worth only $.1728, when compared to a
1967 dollar (100/578.86). This also means that a 2006 dollar is worth
only $.2945 when compared to a 1976 dollar (170.5/578.86). Therefore, it
can also be said that a 1976 dollar was worth 3.4 times what a 2006
dollar is worth (578.86/170.5) in terms of purchasing power.

Therefore, your calculation of a $.39 increase/gallon equating to a $1.44
increase in today's dollars is a bit overstated. The true math equates
$.39 to $1.33 ($.39*3.4). However, this seems like an odd way to examine
the situation. Why not just compare the cost of a gallon of gas then
versus now, in terms of inflation adjusted dollars? A 1976 price of $.74
per gallon, after the mentioned increase that year, was offered in an
earlier post. I'm not sure if that number is 100% accurate, but I have
no quarrel with it. Using that 1976 value, and the CPI data offered
above, that means that a gallon of gas today should cost $2.52 per gallon
($.74*3.4), if gas was to have increased in price commensurate with the
CPI. The only conclusion that can be drawn from this is that the cost of
gas appears to have risen slightly higher than the aggregate cost of
living when using 1976 and 2006 as your goalposts in time, a conclusion I
don't find particularly profound or shocking. Actually a bit of a bore,
not really amounting to much. Not entirely unlike yourself, Jim. Using
any different slices of time for comparison would likely yield different
conclusions, or at least those drawn about the cost of gas.





I just love these rationalizations you guys use in an attempt to make
everyone feel better about being butt-fu*ked by the Friends of Bush.

The friends of Bush?

Regardless, I do not agree with or want folks to feel better about the way
the oil companies are raping us. I have posted facts supporting that
position, including posting of the billion dollar profits of Exxon and the
million dollar payoff given to the retiring CEO of the same company.

And contrary to what RG has to say I do understand inflation and I do not
need his high school entry level economics class lecture to me/this NG on
the matter. ;-)