Baby Boomer Economics


This is not a political commentary!

I need to warn you that it’s also not very entertaining. It is interesting, though, especially if you’re analytical and you like numbers.  I’ve put the actual statistics at the bottom of this post in case you lose interest.  Losing interest is okay.

As previously stated, this is not a political commentary! Therefore, the information is listed by key dates, specifically; the year the leading edge baby boomers were born (1946), the year they started elementary school (1952), the year they started junior high (1958), the year they started high school (1961) and the year they graduated from high school (1964).

One word comes to mind … stability. Between 1946 and 1964, Gross Domestic Product (GDP) increased almost 200%. GDP is one of the primary indicators used to gauge the health of a country’s economy. GDP represents the total dollar value of all goods and services produced over a specific time period. You can think of it as the size of the economy.

The Consumer Price Index (CPI), a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Between 1946 and 1964, CPI increased only 60%.

In other words, the economy grew more than three times faster than the cost of goods and services.  That’s good!

While Federal Spending also increased about 60%, Federal Debt increased only 16%.  The cost of a first class postage stamp increased almost 70%, from three cents in 1946 to five cents in 1964.

Think about it this way … between 1946 and 1964, the US economy consistently increased about 11% each year. Federal Debt went up at about the same rate over the same time.   The price that consumers were paying for goods and services increased at slightly over 3% in each of those 18 years. America was feeling good, and money went a long way.

One dollar in 1946 had the same purchasing power as $1.70 in 1964. If you’d rather consider that comparison in reverse, $1.00 in 1964 was the same in value as 59 cents was in 1946. According to the Bureau of Labor Statistics, the average hourly earning in 1946 was $1.00. By 1964, the average hourly earning had increased to $2.45. So … the $1.00 earned in 1946 needed to be worth only $1.70 in 1964 to keep up with inflation. In reality, that average hourly earning had gone up to $2.45. Economically speaking, things were moving in the right direction.

In 1946, it took $4.03 to buy one British pound. In 1964, it took only $2.79 to buy that same British pound.  Apparently the “Tea Party” had the desired effect.

And we hadn’t even heard of the Euro!!!!

Now, if you’re still reading, here are the actual numbers …………………

Indexed to 1998 dollars 1946 1952 1958 1961 1964
(billions of dollars) Birth First Grade Jr. High High School Graduation
Gross Domestic Product (GDP) $222.6 $358.6 $467.3 $544.8 $663.0
Federal Spending $55.23 $67.69 $82.41 $97.72 $118.53
Federal Debt $271.0 $259.1 $279.7 $292.6 $316.1
Consumer Price Index (CPI) 19.5 26.5 28.9 29.9 31
Unemployment 3.8% 3.3% 4.3% 5.5% 5.7%
Cost of a first-class stamp $0.03 $0.03 $0.04 $0.04 $0.05