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To: arthurus
The real rationale for inflation is always to inflate your way out of debt.

Actually, because you can't hit a 0% inflation rate and because deflation is much worse than inflation, it's safer to target a low inflation rate. I think they currently shoot for 1.5% to 2.5%.

235 posted on 12/01/2006 8:02:59 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: Toddsterpatriot

During the deflation of the late 80s-90s the country experienced an era of unprecedented labor peace because, while nominal wages did not rise, purchasing power rose continuously and industrial employees never got to feeling squeezed. Their dollars bought a little more each year.Real interest rates were at historic levels for times of stable money and nominal rates declined to historic lows.People just felt better.And yes you CAN hit 0% and stay there.


237 posted on 12/01/2006 2:49:58 PM PST by arthurus (Better to fight them over THERE than over HERE)
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