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  • From: Don Bowen <don.bowen AT earthlink.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] The sad story
  • Date: Fri, 28 Oct 2005 16:53:45 -0400

At 10/28/2005, you wrote:
There is a fourth solution, although it might be looked on as just a form of
benefit reduction. That solution is to let inflation run rampant so that we
are paying the dollar amount of the benefits we promised but do so with much
cheaper dollars.


That is the method used by governments since they first started minting money. Debasing the currency is a quick fix but leads to other instabilities. While the government may be paying off promises with cheaper currency, long term borrowers also get to take advantage. Long term borrowers are not only home owners with loans that now can stretch to 40 years but also include businesses that floated long term bonds.

The most recent Time Magazine has an article about the airlines and others dumping promises made to employees. With the support of congress and the courts (both of whom have a very good retirement) companies have dropped health care and pensions. Part of that is that we have the most health care system in the world.

Don Bowen Awl Knotted Up

My travel journal
http://www.braingarage.com/Dons/Travels/journal/Journal.html

My present location is the star on the map in the link below
http://www.mapquest.com/maps/map.adp?latlongtype=decimal&latitude=35.588269&longitude=-82.629132





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