AFS Cinema
Inflation and Recession Not the Same
RECEIVED Fri., Feb. 4, 2005
Dear Editor,
Inflation and recession are not equally mutable. Inflation has several natural barriers. People save money. Brokers recommend short-term investment when inflation is predicted. When stock prices drop, everyone sells. This means less government intervention is needed to reduce inflation.
I support President Bush's efforts to encourage inflation. However, where does it end? For the past century there have been several small recessions creating an economic level far below what it was before. Therefore, inflation is needed to bring the economy back up. Inflation creates jobs. United States citizens need jobs. It is important everyone is out and able to earn a paycheck. Recession puts the jobs created at risk. Would the government simply go back to normal after the unemployment rate is satisfied? I hope not.
Though an unpopular idea, inflation needs to be sustained in order to counter future problems whatever they may be. Inflation is created because of shortages. After long enough, companies will try to counteract by creating a surplus. Surpluses lead to lower prices. A tendency toward recession will begin again. Perhaps a small incremental tax during inflation will help limit inflation from going out of control. Then simply stop raising taxes in years when there is decreased or no growth. Heavy tax breaks are always around for severe situations.
Sometimes taxes are distributed unevenly. Take Denver for example. Several years ago they were not equiped to deal with tourism. Therefore, they had higher taxes on tourist-related goods like hotels.
There still needs to be a way to finely tune the economy. The future is a mystery. A flat tax may not be the best solution. More people need to see inflation and recession are not as equally likely.
Inflation and recession are not equally mutable. Inflation has several natural barriers. People save money. Brokers recommend short-term investment when inflation is predicted. When stock prices drop, everyone sells. This means less government intervention is needed to reduce inflation.
I support President Bush's efforts to encourage inflation. However, where does it end? For the past century there have been several small recessions creating an economic level far below what it was before. Therefore, inflation is needed to bring the economy back up. Inflation creates jobs. United States citizens need jobs. It is important everyone is out and able to earn a paycheck. Recession puts the jobs created at risk. Would the government simply go back to normal after the unemployment rate is satisfied? I hope not.
Though an unpopular idea, inflation needs to be sustained in order to counter future problems whatever they may be. Inflation is created because of shortages. After long enough, companies will try to counteract by creating a surplus. Surpluses lead to lower prices. A tendency toward recession will begin again. Perhaps a small incremental tax during inflation will help limit inflation from going out of control. Then simply stop raising taxes in years when there is decreased or no growth. Heavy tax breaks are always around for severe situations.
Sometimes taxes are distributed unevenly. Take Denver for example. Several years ago they were not equiped to deal with tourism. Therefore, they had higher taxes on tourist-related goods like hotels.
There still needs to be a way to finely tune the economy. The future is a mystery. A flat tax may not be the best solution. More people need to see inflation and recession are not as equally likely.
Naomie Christensen
Temple
Temple
