SquantoWV Loc: Born in Iowa

Grandpa, Can I asked you a question?
N: Grandpa, Can I asked you a question?
GJ: Sure, Noah. What do you want to know?
N: Well, my dad says that things were a lot cheaper when you were my age. Is that right?
GJ: Not exactly. Let me explain. The money we used when I was 14 is different from the money we use today. Your dad is about 6 feet tall; you could also say he is 72 inches tall. 6 and 72 both describe his height, but in different units. When I was 14 the US ‘Dollar’ was the “Silver Certificate”; let’s call it the SC$. Now the US ‘Dollar’ is the “Federal Reserve Note”; let’s call it the FRN$.
N: What is the difference between the two Dollars?
GJ: Well, Noah, until 1964 the Silver Certificate could be redeemed in silver. The Federal Reserve Notes are backed by US Government Bonds. [* ] - [See comment below about the difference this change means.] Here’s and example to compare. Your parents probably say the cost of gasoline has gone up since it cost 25 cents a gallon when I was 14, and $2.75 when you are 14. The 25 cents was in SC$ and the $2.75 is in FRN$.
Do you understand ratios?
N: Yes, I studied them in 4th grade.
GJ: Good.
The 25 cents when I was 14 was 0.18 OZ of silver.
The 25 cents of today has no silver.
The NY Spot [standard daily value of silver] today is FRN$ 16.64. So the 25 pre-1964 quarter is worth 0.18 X FRN$16.64 = FRN$ 3.00. Correct?
N: Yes
GJ: So, if you bought a gallon of gas today and paid for it with a pre-1964 quarter, how much change would you get?
N: 25 cents.
GJ: That’s correct.
The current melt-down price that pawn shops and other places that buy silver and
gold to melt down were paying FRN$3.00 for a pre-1964 quarter a few weeks ago because it contained about FRN$3.50 in silver. A coin dealer may pay you many dollars more for certain coins in certain conditions.
Now, let’s see if you if you can calculate SC$1.00 in FRN$s and FRN$1.00 in SC$s.
N: Well, SC$1.00 = 4 X 0.18 X FRN$16.64 = 0.72 X FRN$16.64 = FRN11.98. and FRN1.00 = SC$1.00 / 11.98 = 0.08 SC$.
Wow, the current Dollar is only worth 8 cents now. The prices hasn’t gone up, the value of the dollar has gone done!
GJ: You smart Noah.
How must does that gallon of gas today cost in pre-1964 coins?
N: Today that gallon of gas costs 0.08 X 2.75 = .22. 22 cents in SC$. So it is really 3 cents cheaper now than it was when you were 14.
GJ: You’re a smart boy Noah. You are going to be a college professor like you mother and grandfather.

[*] IOUs that will have to be paid by future generations - your children, your grandchildren, and maybe your great-grandchildren. The US National debt exceeded $21Trillion on March 12, 2018 - that’s greater than the economic output of the entire country.

DaveC1 Loc: South East US

And that is what is referred to as inflation, which has been going on for at least as long as we've had records of economic activity. (And it does prove that gasoline prices seem to track pretty well with inflation.)

The national debt is other subject totally.

Falcon Loc: Abilene, Texas

The true value of anything is time. When I was a kid, I asked a carpenter how much a saw cost. He told me that when he was just starting out a good quality saw cost him a week's wages. Now it still costs a week's wages. The difference is the numbers used to describe "a week's wages." He also pointed out that saws today are much better and have more features, but their basic function is still the same.

SquantoWV Loc: Born in Iowa

I know it is called inflation. The common man in the street doesn't know what causes inflation, he just thinks it happens. When the 'dollar' gets down to 8 cents, and the government wants to spend 107%+ of the GDP, we are in deep dodo. I remember reading about 70 years ago that in 1928 Germany the value of all the Marks in the country's banks were worth about one cent in US Dollars - i.e. worthless.

SquantoWV Loc: Born in Iowa

I have a granddaughter that just graduated from college and got a job with starting salary of $70,000. Her mother thinks that her daughter is doing so much better than she herself did. $70,000 now was $5,600 when I graduated from college and got my first full time job. However, my starting salary then was $150 per week or $7800.
I financed myself, my wife and four or my six children through college. None of us took any loans. Tuition when I started college was $100 per semester, and $50 per credit in graduate school. All four of my daughters were valedictorians, two have masters degrees, and my wife got her masters when she was in her 70s.

DaveC1 Loc: South East US

Actually the Federal Reserve wants to see an average inflation rate of 2%. They consider that the sweet spot for the growth in the money supply, which is what inflation really is. And we haven't been too far off from that other than in parts of the 70s and 80s. Once again the debt is something different.

You may find this helpful

http://www.in2013dollars.com/1964-dollars-in-2018?amount=1