Opinion: Effect Of Inflation On Retirees
Inflation is created by government spending beyond its income and having to print more currency and/or indebtedness to pay for that overspending.
Inflation discourages motivation to achieve, but probably the worst effect of inflation is its destruction of retirement savings, including Social Security benefits.
A person must rely on his savings to be self-sufficient and continue his independence after reaching the age where he is no longer physically able to work.
At the historic 7% average real rate of inflation in the U.S. over the last century (15% the last 20 years), it is very difficult, if not impossible, to create and maintain savings that will have any buying power in the future. It's not possible to offset inflation with any reasonably safe investment, as the Federal Reserve Board keeps interest rates low (averaging about 1%) to discourage savings and increase spending to bolster the economy.
This destroys the incentive for people to save for the future, or even as a cushion for temporary job loss, emergency, or major depression. This makes them more dependent on the Government, giving the politicians more control of peoples' lives, in lieu of the freedoms promised by our constitution.
We need a law requiring Congress to budget within their income and control spending to within that budget. That law must make any spending beyond that illegal and invalid, except for major disasters and wars, which must be planned for with government savings. This is just common sense, but professional politicians are lawyers, who are noted for their lack of common sense and are only concerned with their reelection. Term limits would correct that.
Harold Byler Jr. of Brady is the author of "Reflections of a Realist" available at bookstores, online at Amazon.com and other retailers, and at the McCulloch County Library in Brady.
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