Letter: Inflation: Good or bad


To the Editor:

Before I decided to build my own house, I was thinking of buying a house. I was trying to figure out how much mortgage we could afford when a friend told me monthly payments would be fixed, and they would be getting easier to handle with pay raises. I didn't understand what he meant.

When I was building my house in 1978, I was still naive about inflation. I made many trips to Narvick's lumber yard ordering supplies. Under the heavy glass top of the counter was a newspaper clipping on what a 5% inflation rate did to the price on a pair of shoes. It was a real eye opener.

Supposedly some inflation is good for us and too much is bad. Economists, politicians and consumers disagree about where the Eden spot should be. The worst rate today is Venezuela with several hundred percent.

Inflation is usually caused by human action. Supply and demand, technology, labor shortage, greed, interest rates, taxes, rising living standards, politics and other reasons can raise or lower it. Inflation can by increased by tariffs on imported items. Tariffs are a hidden tax on the people. Before the income tax was instituted, the federal government was funded by tariffs.

The president just put a tariff on solar panels, which significantly raises the price, cutting new installations, causing layoffs and reducing the growth of green energy. Another new tariff is on washers and dryers. If Trump gets his way, kills NAFTA and puts tariffs on all the items imported from Mexico and Canada. Inflation will soar.

The rich don't notice tariffs but the poor do! Tariffs cause inflation, inflation makes the Federal Reserve raise interest rates, which causes loan rates to rise, causing the price of everything to go up. Inflation and tariffs are bad!

Chuck Johnson