Coping with Inflation

July 11, 1980

Report Outline
Learning to Cut Corners
Effects on Family Life
Alterations to Lifestyles
Special Focus

Learning to Cut Corners

Inflation-Caused Changes in Daily Living

It comes as little surprise to learn that four-fifths of the persons questioned in a recent Gallup Poll said the high cost of living was the most important problem they faced. Last year's 13.3 percent rise in the Consumer Price Index (CPI), the largest since 1947, was followed by an even faster climb during the first three months of 1980. Although inflation has since abated somewhat, economists predict that by the end of the year the increase will be around 12 percent. What is surprising is that most Americans — 60 percent in a University of Michigan Survey Research Center poll — seem to have found ways to cope with inflation. One reason is that incomes have risen, though usually not as fast as prices. Another is that many Americans have found ways to cut their expenses — and consequently their standard of living.

These changes affect nearly all aspects of everyday life — from the type of breakfast cereal they buy to how low they set their thermostats in the winter. The changes involve how they travel to work and how they rear their children, where they go on vacation, and a thousand other things. “Most people are changing. There's no question about that,” said Midge Shubow, White House director of consumer information. “They are definitely making changes in their lives — big ones or little ones.”

Illegal Methods: Income Tax Avoidance

Millions, apparently, have chosen an illegal method of coping with inflation. They do not pay part or all of their federal income taxes, an expense they consider highly inflated and unfair. The Internal Revenue Service maintains that the overwhelming majority of Americans still pay their taxes. But the agency is concerned that many otherwise law-abiding citizens no longer feel quite as morally obligated to abide by the tax laws. “Inflation has undermined much of the moral support for income taxation,” said James Wetzler, chief economist for the congressional Joint Committee on Taxation.

ISSUE TRACKER for Related Reports
U.S. Dollar and Inflation
Oct. 2008  The Troubled Dollar
Feb. 13, 1998  Deflation Fears
Mar. 13, 1987  Dollar Diplomacy
Oct. 14, 1983  Strong Dollar's Return
Jul. 11, 1980  Coping with Inflation
May 16, 1980  Measuring Inflation
Dec. 07, 1979  Federal Reserve's Inflation Fight
Jun. 09, 1978  Dollar Problems Abroad
Sep. 20, 1974  Inflation and Job Security
Feb. 26, 1969  Money Supply in Inflation
Feb. 14, 1968  Gold Policies and Production
Dec. 15, 1965  Anti-Inflation Policies in America and Britain
Mar. 15, 1965  World Monetary Reform
Dec. 02, 1964  Silver and the Coin Shortage
Oct. 17, 1962  Gold Stock and the Balance of Payments
Dec. 15, 1960  Gold and the Dollar
Oct. 10, 1956  Old-Age Annuities in Time of Inflation
Jan. 17, 1951  Credit Control in Inflation
Aug. 10, 1949  Dollar Shortage
Oct. 04, 1943  Stabilization of Exchanges
Jan. 21, 1941  Safeguards Against Monetary Inflation
Mar. 25, 1940  United States Gold in International Relations
Dec. 14, 1937  Four Years of the Silver Program
Oct. 04, 1934  Inflation in Europe and the United States
Jan. 30, 1934  Dollar Depreciation and Devaluation
Sep. 05, 1933  Stabilization of the Dollar
May 29, 1933  Invalidation of the Gold Clause
Mar. 15, 1933  Inflation of the Currency
Oct. 25, 1924  Bank Rate and Credit Control Federal Reserve Policies and the Defaltion Issue
BROWSE RELATED TOPICS:
Economic Crises
Inflation