The American Spectator

Reader Mail

(Page 6 of 13)

Inflation hurts the middle and lower classes in two ways. 1) Wages rise more slowly than prices, so average real wages fall during periods of high inflation. 2) Inflation erodes the savings of businesses and investors, leaving less for businesses to invest in new equipment. Productivity growth requires new equipment. Wage increases require productivity growth. So inflation reduces wage increases. Real wages will resume their ascent when the Fed returns to its senses.

p>Finally, when the Fed pumps vast volumes of money into the economy, as it has done since 2001, a large portion of the new money goes into assets like housing. This drives up the price of housing, makes it less possible for low and middle class Americans to afford, and consequently lowers their standard of living. br> -- Roger D. McKinney br> Broken Arrow, Oklahoma /p> p> LONE STAR COMMUNITY br> Re: Jay D. Homnick's Like a Good Neighbor : /p> p>And all you people in the other 49 thought '' Don't Mess With Texas" was just a slogan on a garbage bag. br> -- Oldguy

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