I think the argument here points to another conclusion: when you’re comparing economic statistics over a long period of time like 40 years, you’re inevitably comparing apples and oranges. Not taking some account of inflation is misleading, but any inflation index has weaknesses. Over time people buy different market baskets of goods, and quality improvements and the introduction of new products cannot be reflected by inflation indexes. In 1969 or 1973 most Americans didn’t have air conditioning in their homes or their cars, they spent zero dollars on computers and videocameras (because they didn’t exist) and the cars they buy today have all kinds of features (including safety features) that didn’t exist then. We wouldn’t want to live without these things today. Yes, we spend much more on health care, but we also get much more for what we spend: lots of people who would have died or suffered serious impairment 40 years ago are cured and live on today. How do you monetize that?
Looking back on 1969 or 1973 as some golden age to which we should wish to return is foolish. You can’t recreate the past and, when you stop and think about it, you wouldn’t want to. It’s like those political observers who look back fondly to the days when Democrats and Republicans got on well together. If you look back in political history, it’s very hard to find such a time. It’s like chasing a mirage. It doesn’t get you anywhere useful.