This article from the Gazette time discusses about the loss of purchasing power in United States. The current financial and economical situation is affecting many people, and the inflation remains very low. However, it is not affecting positively people’s life as the wages increase is even lower.
Energy and health insurance are basically the core elements increasing the general level of prices. Couples with children who sometimes only have one or none salary, are struggling to pay for the schools tuition, the loans as well as the bare necessities.
In order to revive the economy, the FED wants to keep the interest rate at a very low level which will encourage investments, but on the other hand it also favors inflation which decreases workers real purchasing power. If we want to lower the inflation, the interest rate has to be higher, but it might slow down investment and as a consequence the whole economy. The difficulty is to find the right balance and adjust to the trends and previsions. But as long as people will lose spending power, the economy will have a hard time going back to normal.
Energy and health insurance are basically the core elements increasing the general level of prices. Couples with children who sometimes only have one or none salary, are struggling to pay for the schools tuition, the loans as well as the bare necessities.
In order to revive the economy, the FED wants to keep the interest rate at a very low level which will encourage investments, but on the other hand it also favors inflation which decreases workers real purchasing power. If we want to lower the inflation, the interest rate has to be higher, but it might slow down investment and as a consequence the whole economy. The difficulty is to find the right balance and adjust to the trends and previsions. But as long as people will lose spending power, the economy will have a hard time going back to normal.
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