In dollar terms, what does Presidential Candidate Ron Paul mean when he says: "The standard of living is going down for a lot of people on fixed incomes." What does Mr. Paul mean when he says this is what happens when "a country destroys its money" and "destroys or eliminates the middle class." What does that mean in dollars and cents?
It means the American people are aggregately losing the value of their banked money at the rate of $16,881 per second, $970,904 per minute, $58,254,253 per hour, $1.398 billion per day, or $510,304,260,000 per year (that’s $510 billion!). That is the most conservative figure, based upon a 7% rate of inflation. The erosion of American wealth could be as high as $780 billion/year if a higher 10% inflation rate is employed.
How did I come up with these numbers? Americans have $8.505 trillion on deposit in American banks (FDIC numbers: includes $6.410 trillion in interest-bearing accounts, $1.848 trillion in time deposits like CDs, with an additional $2.094 trillion in non-interest bearing accounts).
The estimated yield (interest) on that banked money is less than 1% today. Let’s say Americans are getting 1% interest on $8.505 trillion. That would amount to $85.05 billion. Now take away ~18% of $85.05 billion the federal government would be in taxes, or $15.3 billion, and this actually amounts to $69.78 billion gained that must be balanced against inflationary losses.