NITA LOWEY CREATES INFLATION

Voted YES on Congressional pay raise.
(Jun 2009)

Nita Lowey's salary: $174,000
The average United States citizen's income: $46,000

Want a raise? Don't beg your boss, just vote yourself one. That's what Nita Lowey did. While our government was in the process of increasing our debt by one trillion dollars in one of the worst economic crises, Nita Lowey thought it would be a good time to vote for a 2.8 percent pay raise for herself and her fellow Congressmen on Capitol Hill. This, of course, is just above the 2.7% inflation rate that the country faced in 2009 and cost the taxpayers $2.5 million. But isn't leadership like this worth it? Not at all.

The reason for this $4,700 increase was to compensate for the increase in the cost of living(COLA), which as we all know as the inflation rate. But it is important to know what causes inflation.

Inflation, in short, is an increase in the amount of money in circulation. Money is printed, some might say counterfeited, by the Federal Reserve and sold to the US government, who then distributes it to the most well-connected businesses. In the last year, this was Wall Street and the Auto Industry. With the increase of money in the system, people spend more, increasing the demand for goods. And since prices are determined by supply and demand, as demand goes up so do prices.

The people who receive the money first before the prices rise benefit. But the money takes time to trickle down to the working class and the poor, and their salaries do not adjust until after the price increases have taken effect. This indirect tax, is referred to as an inflation tax and is a major cause of the redistribution of wealth from the poor and the middle class to the politically well-connected.

The worst thing about this system is that as citizens, we can not do anything directly about inflation. It is caused by an injection of money into the economy by the Federal Reserve and the government. The only thing we can do is vote for a Congressman that has some economic sense about them. Sadly, Nita falls way short in this category having voted to spend:

• $825 billion for the economic recovery package
• $192 billion in additional anti-recession stimulus spending
• $15 billion for the bailout of GM and Chrysler

Does anybody else find it ironic that her poor economic judgment led to the inflation that led to the justification for her increase in pay?

Further Reading:
A Letter to Your Representative
The Life and Death of the US Dollar