This would leave him with 3% less real purchasing power than he has under the current tax system.
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In reality, this path simply represents just another form of default, as creditors will ultimately be paid back in currencies that are worth less in terms of real purchasing power.
Indeed, they are more burdensome, because Congress has, explicitly or implicitly, promised to pay these benefits off in real (purchasing power) terms.
These are real wage rises by the way, real increases in purchasing power.
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The ultimate in energy efficiency will come when power producers can turn on and off small substations at a moments notice based on real-time data on energy consumption at a household level, and consumers can make power purchasing decision based on real-time metering of their consumption.
Looking at real rates can help you determine how much your purchasing power may grow, says Mihir Worah, head of the real-return portfolio management team at Pacific Investment Management Co.
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Likewise, an increase in the value of the dollar against another currency likely indicates that the central bank of the other country is lowering real interest rates and diluting the purchasing power of that currency at a greater pace than the Fed.
He has promised not to cut pensions, although they might have to be frozen, making pensioners lose in real terms as inflation and taxes eat into purchasing power.
If the Fed chooses to reduce the real burden of the debt via inflation, the purchasing power of money will fall along with the foreign exchange value of the dollar, and those who trusted in U.S. public debt will suffer.
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After the credit crisis set in and the healing aspects of deflation began to take hold, central banks rapidly expanded the supply of base money in an effort to quickly erode the purchasing power of their currencies and bring real estate prices higher.
Of course, you have destroyed the purchasing power of your currency, given a real hit to the incomes of the middle class, defrauded those who bought your debt, and in all likelihood you did not hold inflation to just 5%.
The 2005 ICP round provides estimates of purchasing power parities (PPPs) of currencies and real product per capita for 150 countries, and the results for China and India are discussed in the context of the size of these economies.
And just as in real life, purchasing an expensive virtual good can send signals of status, wealth and power within virtual worlds and social networks.
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