My letter in The Record

26 Mar

Ways to fix our economy

Regarding “Yellen, Powell say more needed to curb economic ills” (Page 10A, March 24): The Federal Reserve has printed trillions of dollars and the federal government has spent trillions of dollars to supposedly boost employment and economic growth for the past year in response to government lockdowns. These policies will not fix our “economic ills.” On the contrary, they already are unleashing economic distortions — higher prices and widespread speculation in the financial markets.

A sustainable economy requires savings and investment to create the products and services the public wants. In addition, we need a currency that maintains its purchasing power, which will benefit low- and middle-income families. The Federal Reserve’s goal of 2% inflation is anti-family. The interest rate on savings accounts is close to zero. The Fed, in other words, is the financial enemy of working people.

As far as government spending is concerned, the federal government under both Republicans and Democrats has run up deficits for decades. The current thinking — and I am using that term loosely — in Washington is that “trickle-down economics,” money flowing from the federal government in the form of “stimulus” checks, is a necessary Band-Aid to deal with government mismanagement of the economy.

The cure for our economic ills is lowering taxes, abolishing unconstitutional federal spending, removingbarriers for small businesses, ending the lockdowns immediately and preventing the Fed from debasing the dollar. Until we get the “cure,” the economy will continue to have boom-bust cycles.

Murray Sabrin, Fort Lee. The writer is a professor emeritus of finance.

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