Plioric

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[Plioric @Plioric89]

A 1960 dollar was worth 36 cents in 1981, and Ronald Reagan held up the change on national TV to prove it.

A quarter, a dime and a penny.

It was February 5, 1981. He had been president for 16 days.

Inflation had hit 13.3% in 1979 and 12.4% in 1980, the first back-to-back double digits since World War I. Mortgages cost 15.4%. 7 million people were out of work. The national debt was $934B and climbing toward $1T.

His explanation started with a rule. Besides taxes, government has only 2 ways to get money.

It can borrow, competing with its own citizens for loans and pushing interest rates up.

Or it can print.

It had done both, he said. Both are inflationary.

Then he went after the word itself. People hear “inflation” and blame whoever puts on the price tags. In his telling, inflation isn’t high prices. It’s money losing value, too much money chasing too few goods.

His answer was to cut spending and cut income tax rates 10% a year for 3 years.

Inflation did come down, to about 3% by 1983. The cost was Paul Volcker’s Fed squeezing the economy into a recession, with unemployment reaching 10.8% in late 1982. Reagan let him do it.

The other half went differently. Taxes fell faster than spending did. The debt crossed $1T that same year and nearly tripled by the time Reagan left.

That means his own government used way 1, borrowing, on a huge scale, and inflation still fell. Supporters say his backing of the Fed made that possible. Critics, and many economists, give most of the credit to Volcker.

Today’s numbers are a different shape. September inflation came in at 3.7%, up from 3.4%. Gasoline is up 34.2% in a year as the war in Iran drives energy prices. Core inflation, without energy, is 2.6%. The Fed raised rates in September for the first time since 2023.

In 1981, Reagan blamed too much money.

In 2026, the first thing to run short was the goods.

[Plioric @Plioric89]

@0x_Squirrel That's the part that gets left out when people only remember the speech. Letting Volcker finish the job was the actual decision that cost him politically.

[Plioric @Plioric89]

A 1960 dollar was worth 36 cents in 1981, and Ronald Reagan held up the change on national TV to prove it.

A quarter, a dime and a penny.

It was February 5, 1981. He had been president for 16 days.

Inflation had hit 13.3% in 1979 and 12.4% in 1980, the first back-to-back double digits since World War I. Mortgages cost 15.4%. 7 million people were out of work. The national debt was $934B and climbing toward $1T.

His explanation started with a rule. Besides taxes, government has only 2 ways to get money.

It can borrow, competing with its own citizens for loans and pushing interest rates up.

Or it can print.

It had done both, he said. Both are inflationary.

Then he went after the word itself. People hear “inflation” and blame whoever puts on the price tags. In his telling, inflation isn’t high prices. It’s money losing value, too much money chasing too few goods.

His answer was to cut spending and cut income tax rates 10% a year for 3 years.

Inflation did come down, to about 3% by 1983. The cost was Paul Volcker’s Fed squeezing the economy into a recession, with unemployment reaching 10.8% in late 1982. Reagan let him do it.

The other half went differently. Taxes fell faster than spending did. The debt crossed $1T that same year and nearly tripled by the time Reagan left.

That means his own government used way 1, borrowing, on a huge scale, and inflation still fell. Supporters say his backing of the Fed made that possible. Critics, and many economists, give most of the credit to Volcker.

Today’s numbers are a different shape. September inflation came in at 3.7%, up from 3.4%. Gasoline is up 34.2% in a year as the war in Iran drives energy prices. Core inflation, without energy, is 2.6%. The Fed raised rates in September for the first time since 2023.

In 1981, Reagan blamed too much money.

In 2026, the first thing to run short was the goods.

[Plioric @Plioric89]

@gosh_sol_eth Knew a musician whose manager put family members on payroll as consultants too, took years before anyone added up what that quietly cost him.

[Plioric @Plioric89]

@gosh_sol_eth Yeah, a visual beats any chart Congress ever used to explain the same thing

[Plioric @Plioric89]

@Benderxxx7 Samsung’s volume kept it number one for years, now that's the most exposed spot.

[Plioric @Plioric89]

@0x_Squirrel He stayed on the payroll just to keep walking into kitchens and calling the product bad, instead most founders who sell take the check and disappear.

[Plioric @Plioric89]

@gosh_sol_eth He swore under oath he was sterile while Apple was going public at a $200 million valuation. The timing wasn’t a coincidence.

[Plioric @Plioric89]

@xbtnoah Better than Carter is a low bar. Volcker’s the one who actually killed the inflation.

[Plioric @Plioric89]

8 million Americans were out of work in 1980, and Ronald Reagan said the White House had just blamed them for inflation.

2 million of them had lost their jobs in just the last few months.

Reagan said all this on the debate stage against Jimmy Carter. He started by attacking an idea: that inflation had come upon the country like a plague, that it was uncontrollable and nobody could do anything about it.

Entirely spurious, he called it. And dangerous to tell people.

Then he gave his numbers. When Carter became president, inflation was 4.8%, cut in 2 by Gerald Ford. Now it was running at 12.7%.

Carter had promised not to use unemployment as a tool against inflation. Yet his 1980 economic message called for lower productivity, lower GNP and higher unemployment. In January, Reagan said, inflation had been over 18%.

Then came the list of who Carter had blamed: OPEC, the Federal Reserve, low productivity, and finally the American people, for living too well. They would have to share in scarcity and learn to do with less.

His time was running out, so he went fast.

His fix was more productivity and a cheaper government. Balance the budget and stop flooding the market with printing-press money.

"We don't have inflation because the people are living too well."

"We have inflation because the government is living too well."

[Plioric @Plioric89]

@0x_Squirrel Campaigning against inflation and actually tightening money to kill it are two different jobs.

[Plioric @Plioric89]

@xbtnoah His 10% would be worth roughly 300 billion today.

[Plioric @Plioric89]

@recketino Do you think he would be trading if no country had flopped instead?

[Plioric @Plioric89]

@0x_Squirrel Steve spoke about this on a 2021 podcast, said he still can't license a singe Bob Ross product without the company's approval.

[Plioric @Plioric89]

@0xLonly By 2020 when Tesla's actual cell cost had dropped to around $100 per kWh, it was still above that $80 metals floor he calculated.

[Plioric @Plioric89]

@gosh_sol_eth Comedy Central reportedly made over 100 million off syndication and streaming during those fifteen years he saw nothing.

[Plioric @Plioric89]

@gosh_sol_eth Fair, but it took Congress five years to act on an argument everyone already understood, that gap is the part worth remembering too.

[Plioric @Plioric89]

$7B of "undeserved profit" is what Ronald Reagan said the government took from inflation in 1 year of income taxes.

His argument in 1976 fit into 1 sentence. Washington doesn't feel the pain of inflation the way you do, because it makes a profit on it.

The $7B came from your raise.

You get a cost-of-living raise. It only keeps you even with prices. But it pushes you into a higher tax bracket, so you pay a higher percentage in tax and lose purchasing power.

Multiply that across every paycheck in America, and you get the number. "And this year they'll do even better," he said.

Then he showed how Congress handled its own pay.

The July before, Congress had very quietly passed a law, and the president signed it. Every congressman would now get an automatic pay increase whenever the cost of living went up.

It would have been nice, Reagan said, if they'd thought of something like that for the rest of us.

His fix was to repeal the automatic raise. In his view, the people whose spending caused inflation should feel it like everyone else.

Their raise was automatic. Yours came with a higher tax bracket.

[Plioric @Plioric89]

@batagonx Exactly the mechanism Reagan described in 1976, just running through CPI formula choices instead of bracket thresholds this time.

[Plioric @Plioric89]

@soncarius Sheena Iyengar’s jam study found 3% of shoppers bought from the 24-jam table versus 30% from the 6-jam one.

[Plioric @Plioric89]

@0x_Squirrel Congress extempted itself from inflation while taxing everyone else for it. That's the part people actually remember