To the editor:

Congress recently passed the dubiously named Inflation Reduction Act. But will it have the desired effect? The answer requires accurate definitions.

Most people define inflation as an increase in prices. But this confuses cause and effect. Previous generations had the correct understanding. The definition in the 1947 edition of the American College Dictionary is “undue expansion or increase of the currency of a country, esp. by the issuing of paper money not redeemable in specie.” That is a definition you will rarely see today. So can we confirm a recent increase in the money supply?

Absolutely. According to the Federal Reserve, since early 2020 the money supply spiked from $15 trillion to $22 trillion, an increase of 47 percent. This signals equivalent price increases. That amounts to an almost 1/3 reduction in the purchasing power of our dollars. This not only affects what we pay in the store, but also erodes savings and negates wage increases. The damage to our quality of life is obvious.

But why would our government implement monetary policy that is so clearly detrimental? Economist John Maynard Keynes observed “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

He continues “Lenin was certainly right. There is not subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

So as bad as our current situation is, it is critical that we understand that it can get much, much worse, eventually resulting in the destruction of the best economic system in human history, free enterprise. The driver of this catastrophe is when politicians can’t tax or borrow enough to finance their vote buying schemes, so they turn to the printing press. Currently, in socialist Venezuela the inflation rate is 400 percent. Imagine sacrificing for a year to save up $1,000 to buy something, only to find that it now costs $4,000.

Whether our current situation is due to ignorance or corruption, our current path is unsustainable.

The solution starts with the upcoming election.

Wayne Wolf

Farnhamville