Never trust anyone over 30 (unless they pay with Sound Money)
Without a gold and silver standard anchoring prices, Americans have felt their standard of living dwindle in the face of rising prices and staggering wages. While the shrinking middle class dominates the focus, young people have arguably suffered the most. If today’s youth were to travel back to the early 1960s when America was last on a gold standard and quarters were still made out of silver, they would find that their grandparents were far wealthier at the same age.
Just like today, young people of yesteryear were low-skilled and usually on the minimum wage pay scale. However, the $1.25 per hour that the young often earned stretched much further than today’s $7.25 per hour. With hamburgers starting at 15 cents, and fries and drinks at 10 cents, you could buy 3 meals at McDonald’s with just 1 hour worth of work. Today, you can barely buy 1 value meal with prices north of $6. When it came to entertainment, the movies were actually affordable at under $1. Given today’s average ticket of $8, one hour of work is simply not enough. And with gas at 25 cents, low wage earners in the early 1960s could buy 5 gallons, while their present day counterparts can only afford two with the national average at $3.51.
The essential reason that young people of the 1960s had higher real wages was because they were paid in real money. If today’s youth had the option of getting paid $1.25 per hour in silver quarters, they would actually be wealthier than their grandparents at their age. With the melt value of five pre-1965 quarters at $30.50, you could purchase 5 value meals at McDonald’s, easily afford 3 movie tickets, and buy over 8 gallons of gas on one hour’s worth of work. What makes silver’s increase in purchasing power more amazing is that it has occurred while governments around the world have demonetized the precious metal. If silver reemerges as a medium of exchange via the government or the free market, its purchasing power would rise substantially.
Despite the existence of innovative technologies like iPhones and HDTVs, wealth on a relative basis has not grown but diminished greatly for young people. Unfortunately, the economic situation will get far worse in the near future. While the Occupy Wall Street movement has re-instigated an age-old fight between the rich and poor, the real fight between the young and old is being ignored. In 2011, the first of 77 million baby-boomers became eligible for full coverage of Social Security and Medicare. Of course the problem is that the US can’t afford the $117 trillion in promised benefits. Few politicians are brave enough to cut spending, and taxes would have to rise to oppressive levels to finance the needs of the elderly. The only option that politicians will want to take is the current one: print money and cut checks. This strategy will prove disastrous for the value of the US Dollar as the government attempts to transfer wealth from the young to the old. Prices on food, energy, and healthcare will skyrocket as seniors cash in their checks. In the end everybody will suffer. Sooner or later, Americans will learn the forgotten lesson that only real money like gold and silver can guarantee that the standard of living rises for everyone simultaneously.
Devin Roundtree will be graduating May 2012 with a M.A. in economics from the University of Detroit Mercy.