So why does the article not condemn the idea of centrally-planned monetary policy? Why isn't it calling for the abolition of the Fed and the establishment of sound money? All it does is throw some figures at us -- if inflation continues at the present 4% rate a private pension or annuity payment of
When there are too many dollars chasing too few goods and services, you get inflation. And it's the Federal Reserve's job to get that balance right. When the Fed lowers rates, it pumps more cash into the economy; when it raises rates, it pulls the money back in.
"When inflation first shows up, people are always wanting to blame other things than Federal Reserve policy," says Brian Wesbury, chief economist at First Trust Advisors. "In the 1970s it was OPEC, today it's China. But in reality, our inflation is coming from easy money."
$5,000 a month will buy only $2,300 worth of goods and services in 20 years' time. If inflation jumps to 6%, the purchasing power of that retirement income will fall to $1,600 over that same period.And if it gets far worse than either of these, then what? Will the U.S. president personally run the printing presses in a gesture of "concern"?
Why are so many people willing to let the Fed ruin us?