Your dollar has lost 96-97 percent of its purchasing power since 1913. This is not bad luck or mysterious market forces. It is the result of deliberate policy choices that steadily, quietly drained your wealth—and convinced you it was being done for your benefit.
The World That Was Stolen
For over a hundred years after America’s founding—roughly 1774 to 1900—prices did not steadily rise. Net cumulative inflation over that entire century was close to zero. Prices often fell, not because of poverty or collapse, but because of human ingenuity: more efficient factories, labor-saving machines, railroads slashing transportation costs, etc. Each new invention meant goods cost less to make and less to buy. Economists call this “good deflation”—the natural, healthy fruit of a productive economy.
Your great-grandfather’s dollar actually gained purchasing power as the decades passed. Imagine working hard and watching the cost of food, clothing, and tools gradually fall—so the same paycheck stretched further every year without a raise. That was the American reality for over a century. Then it was taken. As argued by George Selgin in Less Than Zero, a falling price level in a growing economy is not dangerous, it is the expected and desirable result of increased productivity.
The Great Excuse
The Great Depression gave those in power the justification they needed. We now know—what Federal Reserve Chairs have effectively admitted—that the Depression was not an inevitable market catastrophe. It was caused, deepened, and extended by catastrophically-bad government decisions: destructive monetary policy, trade wars, and tax hikes in the middle of an economic collapse. Without those failures, economists widely believe it would have been a painful but short recession—remembered the way we remember the recession of 1920, which ended quickly because the government largely stayed out of the way.
Instead, the Depression became the defining economic trauma of the 20th century. And that trauma became a political tool. Policymakers saw the Depression’s “bad deflation”—caused by their own failures—and used it to declare that all deflation, forever, was the enemy. They lumped a century of prosperity-driven falling prices together with their self-made disaster, called it all dangerous, and declared that responsible policy meant prices must always rise. The Federal Reserve’s own statements from this era make this policy rationale explicit.
The Crime by the Numbers
American workers are 5–6 times more productive per hour than in 1913. That explosion in productivity should have dramatically increased your dollar’s purchasing power—goods should cost a fraction of what they do now. Instead, the exact opposite happened: You work harder, produce more, and your money buys less every single year. That gap—between what your productivity should have delivered and what inflation actually let you keep—is the precise measure of what was taken.
The Smoking Gun
Then there is Beardsley Ruml. He was Chairman of the Federal Reserve Bank of New York and a key advisor to President Roosevelt—one of the most powerful men in American finance at the exact moment these monetary changes were being locked in place. In the 1940s, he published an article stating plainly: given control of a central banking system and a currency not backed by gold, a sovereign government is finally free of money worries and need no longer levy taxes to fund its spending.
Read that carefully. A government with control of the money supply can create currency from nothing and spend whatever it wants, on whatever it wants, without asking your permission, without passing a tax bill, without ever having to tell you what it is costing you.
For most of American history, the government’s power to spend was chained to its power to tax. Taxing required legislation. Legislation required votes. Votes required facing the public and justifying every dollar. Inflation replaced that accountability entirely. Your wealth is now taken not by a vote in Congress but by the quiet, invisible erosion of every dollar you hold.
Ruml then went further. He proposed what we now call payroll withholding—as he explained in a 1943 radio interview—having employers quietly remove taxes from every paycheck before the money ever reaches your hands. The genius of the scheme, in the darkest sense, was that it solved the government’s collection problem while making the tax nearly invisible. Instead of one annual bill that forced people to sit down, do the math, and feel genuine rage at the total, you simply receive a slightly smaller paycheck every two weeks. The difference between what you earn and what you receive becomes background noise—expected, normal, something you stop thinking about after your first job.
What This Means Today
The costs of things you cannot live without have not merely kept pace with inflation—they have demolished it. Since the 1970s, housing costs have outpaced general inflation by 2-3 times. Medical costs have outpaced it by 3-5 times. College tuition has outpaced general inflation by 4-5 times since 1980. An entire generation has been effectively priced out of homeownership, one serious diagnosis away from bankruptcy, and entering the workforce not just broke but deeply indebted—their future earnings already pledged to lenders before they cashed their first paycheck.
In every one of these sectors—housing, healthcare, education—government involvement, subsidy, and money creation have driven costs skyward while making it nearly impossible for market competition to bring them back down.
Inflation is also the most regressive tax ever devised. It transfers wealth upward—from those who earn money to those who already own things. The working person holding dollars loses; the person holding real estate, stocks, and hard assets wins.
The productivity gains of American workers—your parents, your grandparents, you—should have made life steadily, measurably more affordable. Instead, those gains were quietly redirected. And citizen control over government spending—the most fundamental power in a democracy—was abolished without a single vote.
Beardsley Ruml told you exactly what was happening; he published it, he put his name on it. Nobody was supposed to be paying attention.
