I was surprised to read the editorial Aug. 18 on inflation. It concluded that Federal Reserve Chairman Alan Greenspan is right in increasing interest rates to curb inflation.
Increase in interest rates on loans discourages people from purchasing new homes, which in turn causes unemployment. Lower interest rates on loans encourages people to buy new homes which, in turn, means the purchase of new ranges, dishwashers, refrigerators, washing machines and dryers, carpets and furniture. All these purchases increase employment and add to the growth of the economy.
If Greenspan is sincere in curbing inflation, he ought to request all banks to stop issuing credit cards and transferring money electronically. Credit card use and the transfer of electronic money between banks increases unnecessarily the supply of money. According to Webster’s dictionary, inflation is too much money in circulation.
