Dollar's Century-Long Slide: 97% Lost in Purchasing Power Since 1913

The US dollar has lost an astonishing 97% of its purchasing power since 1913, when the Federal Reserve was created. According to Consumer Price Index data from the U.S. Bureau of Labor Statistics, something that cost $100 in 1913 would require around $3,370 today to purchase an equivalent basket of goods and services.

This means that a dollar from 1913 retains only about 3 cents of its original purchasing power. The decline is not solely due to the Federal Reserve's actions, as some argue that Congress spends beyond its means and the Fed simply prints the difference. However, federal deficit financing works through Treasury borrowing, not printing money.

The government has run annual deficits almost continuously for decades under both Republican and Democratic administrations, with Presidents proposing budgets and policies, while Congress controls appropriations and taxation. The Federal Reserve operates separately, controlling monetary policy, influencing interest rates, and creating bank reserves when purchasing financial assets.