[bayourod]

I took college economics before you were probably born. But as best I recall The Employment Act of 1942 set the definition of "Full Employment" at 4.5%. If you research it you may look under "The Full Employment Act" because most economists don't known that the name was changed in committee to drop the word "Full".

Most economist believe that there is a trade-off between employment and inflation.

[sixmil]

Couldn't find the act, but I did stumble upon a pretty cool website that I had heard about before:

Full employemnt definition

Anyway, the supply siders have a bunch of theories that rest on 'overemployment' causing inflation. In fact, I believe the entire neocon world view of economics rests on this premise. I simply don't buy it. It makes since that everybody has money so they're all out running up prices on everything. But that isn't really what happens. The supply of stuff to spend those dollars on automatically increases to meet the demand.

Inflation is all about the supply and demand for money. When the gov't has a loose money policy, more money gets borrowed which raises the supply. If this moves faster than demand, you get too much money out there which means inflation.

I agree that controlling inflation should be the top or one of the top priorities. But I also think it could be held even lower than the 2.5% or so that we seem to be able to hold steady. You can still have everyone employed, but you need to watch the money supply pretty closely.