These days in the United States, we don’t think too much about a single dollar; a dollar is simply incapable of purchasing anything signifiant, if at all. The US dollar has been on a continuous decline since the end of World War Two, and the US dollar has not had an equivalent purchasing power to that of 1776 for 120 years!
The intention of this post is not to transmit a sense of doom and despair, for I believe this predicament will come to an end; my intentions are to highlight a historical difference in financial perspective.
So how would current prices look if they were adjusted to reflect the strength of the US dollar in 1776? This adjustment is obviously assuming that the monetary value of the following items is exactly the same as it is today, which is an unrealistic assumption that we will accept for simplicity and to contrast the 2022 dollar with its 1776 counterpart. The values of these items were subject to fluctuations over the years, and some items either were nonexistent or possessed a different supply-demand ratio.
Average Price of Common Items: 2022 (1776)
- Pound of Bananas: $0.64 ($0.02)
- Dozen of Eggs: $2.71 ($0.08)
- Gallon of Milk: $4.15 ($0.12)
- Gallon of Gasoline: $5.06 ($0.15)
- Roundtrip Domestic Flight: $330 ($9.69)
- Single Bedroom Apartment Monthly Rent: $1,129 ($33.15)
- New Car: $47,077 ($1,382)
- New House: $402,400 ($11,815)
It is also interesting to see the price of some of the United States’ largest land purchases adjusted for inflation. America truly exchanged a great amount of money for these territories, nearly three billion 2022 dollars for these seven purchases alone!
Price Paid for Major US Land Purchases: The Year of (2022)
- Louisiana Purchase 1803: $15,000,000 ($393,000,000)
- East and West Florida Purchase 1819: $5,000,000 ($117,000,000)
- Mexican Cession 1848: $15,000,000 ($563,000,000)
- Gadsden Purchase 1854: $10,000,000 ($353,000,000)
- Alaska Purchase 1867: $7,200,000 ($144,000,000)
- Philippines Purchase 1898: $20,000,000 ($714,000,000)
- Danish Virgin Islands Purchase 1917: $25,000,000 ($579,000,000)
Though it appears that things would have been cheaper in the past, that is not the case; the prices that I displayed of the items of today are equivalent to those of the specified year, I have only adjusted for inflation. This topic is a little more complicated than this simple calculation. The correlation between income, inflation, supply and demand, etc., all dictate when we consider something expensive or not.
I trust that this gives you a better perspective of the economic world of the United States that the founding fathers experienced.
Onward American 🇺🇸
Source: Average Cost of Domestic Airfare
Source: Average Monthly Apartment Rent
Onward American 