“A Worried Government Trapped On Inflation” – WSJ
“There is a moral dimension, too. Coupled with interest rates being close to zero, inflation is an instrument of war against savers. It rewards those who have been irresponsible — governments that borrow too much and consumers who do similar — and punishes those who have behaved responsiblely by choosing to live within their means and trying to make provision for themselves and their families.
The politics of this are thus highly dangerous for ministers. They are trapped, between an independent central bank that focused too much on narrow inflation targeting in the boom years and now says it doesn’t matter because higher inflation is just a blip, overextended debt-laden consumers who want interest rates low to keep their show on the road, and hard-pressed savers (many of them older, and likely to vote) who are being fleeced.” Read more.
“A Worried Government Trapped On Inflation”
Iain Martin
Wall Street Journal, January 18, 2011.
Image by Boaz Yiftach / FreeDigtalPhotos.net.
