Why is it incorrect to say the 2022 dollar is worth 592% less than the 1972 dollar.

4 Answers

The implication of 100% less is that you have nothing left.

So over 100% less is not really meaningful.

You would say that the purchasing power of the dollar is 18% of what it used to be, or however the math works out.  If 300% inflation is everything costs 4X as much, then the purchasing power is 25% of what it was.
>Why is it incorrect to say the 2022 dollar is worth 592% less than the 1972 dollar.

"Less than" implies difference.  100% - 592% = -492%.  This is nonsense, of course.

To figure out what something that cost $1.00 in 1972 would cost in 2022 you multilpy by 5.92. Therefor to figure out what something that costs$1.00 in 2022 would have cost in 1972 you divide by 5.92.  1/5.92 = .169 or 16.9%.  This says that the 2022 dollar is worth 16.9 1972 cents. Therefor the 2022 dollar is worth 16.9% *of* the 1972 dollar.  If you want to dramatize it say that the 1972 dollar was worth almost six times as much as the 2022 dollar is.

In fact comparing price levels over that long a time span is rather questionable.  About the best you can say with any confidence is that cumulative inflation over the last fifty years amounts to at least 100%.
It will become negative my guy
by
Ok so I have read other comments on this thread including your own and I get the feeling that the answears are confusing you more and more, so I thought I would show you a different approach.

For some reason I cant access the website you provided but according to google we have the following:

>"The dollar had an average inflation rate of 3.94% per year between 1972 and today, producing a cumulative price **increase** of 591.65%."

1.For simplicity we will say 591.65% is equal to 592% as you have stated.  The keyword to watch out for is "increase" of 592%. If I have a product in 1972 that costs, lets say 1 dollar, what I assume you would do to calculate the price of that product in 2022 (from other comments) would be 1$\*5,92 = 5,92$, meaning it went up in price from 1$to 5,92$. But that is incorrect.

What you need to do is to make sure you include the word **increase** in your logic. If I have 1 dollar and that is all I have that is 100% of my money, if I now say I **increase** the amount of money I have by 592% I know have 100% + 592% = 692%. So in the previous example what you would actually do to calculate the price of a product from 1972 would be 1$\*6,92 = 6,92$.

2.Now I personally feel like it is much clearer to talk about scaling factors than percentages. For example, by our previous calculation, we would say that on average between 1972 and today the prices increased by a factor of 6,92. You might notice I used the word increase here again but interpreted it differently. From experience I would say that if people talk about the increase of something in percentages they usually mean the procedure I presented you above and the increase by a scaling factor means that we just **multiply** the given value by that factor.

So given a list of prices of certain items from 1972 to calculate their expected prices today you would multiply every price by 6,92.

(1972) ----------> (2022)

* 1$----------> 6,92$
* 5$----------> 34,60$
* 18$----------> 124,56$

3.Now if you want to go in the other direction, meaning compare the prices of today with the prices in 1972, you would **divide** the given value by 6,92 so our scaling factor the other way around is given by (1/6,92) = 0,14. For example

(2022) ----------> (1972)

* 1$----------> 0,14$
* 5$----------> 0,72$
* 18$----------> 2,60$

Now if we want to go back and talk about the **decrease** of prices in percentages from 2022 to 1972 we would consider 6,92-1 = 5,92 and 1/5,92 = 0,168 (we subtract the 1 or 100% because of the argument above). Meaning  to formulate the quote from google the other way around I guess one could say:

>"Given the inflation betweend today and 1972 the cumulative price **decrease** amounts to 16,8%."

And to finally answear your question (or give you a better formulation of your statement) and not talk about increases or descreases of prices but rarther the prices themselves and by that the "worth" of the dollar, I feel like the clearest way to state what you mean is to say:

1$today is worth 0,14$ in 1972, meaning it is worth 0,86$less or in percentages **86% less.** (Because 1$\*0,86 = 0,86\$ gives the amount by which the price of one dollar differs from 2022 to 1972)

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