| Show Inflation Transfers Wealth Inflation n redistributes the national wealth in some pe pecullar cullar and ways THOSE who warn against the inflationary effects of government gov gov- deficits are s so o m me- me e times regarded as merely trying try try- ing to protect positions of entrenched en en- trenched wealth But a new study of the effects of Inflation tion since 1949 shows that by and large it is the pros less groups who suffer most from the wealth transferring effects of inflation Th The better better- off groups are arc not affected as severely and sometimes even gain through Inflations inflation The new study is an examInation exam exam- of the national balance sheet of the United States and andIs is published under the sponsorship sponsor sponsor- I ship of the National Bureau of I Economic Research L I 1 k e all an anthe the National Bureau publications it is a thorough detailed and completely unbiased anal of its subject matter TilE THE PROCESS of inflation does not create any real wealth nor does it ft directly lee te- stroy any real wealth What it does docs is transfer wealth from one group of holders to an other The direction of such transfers as revealed in th this study contains some es Cs The way an individual family fame fam- ily is affected by inflation depends de de- i on a number of factors its debtor or creditor posItion its status as a home owner or renter its ownership of stocks etc TilE TIIE CHIEF beneficiary of the rising price trend during the past 15 years has been the federal government It has gained in net worth because its liabilities in th the form of public debt are in effect reduced re re- by inflation But this gain to the federal government had to come out I of somebody's pockets It i turns out that it came mainly out of the pockets of lower come families who rent their living quarters especially older people in this tion This would include a large number of the less urban families who are the cause of so much concern by advocates of welfare pro pro- grams PERSONS owning mo r t t. t homes tend to gain on balance from inflation lion tion reduces the real burden of their mortgage debt Upper income f a m mill i 11 e a s whether they own or rent their homes are as a class protected from the transfers of wealth involved in inflation Typically such families own corporate stocks and a rising trend In prices exerts an upward upward up- up ward leverage on the value of their holdings THESE are of course broad generalizations to which there may be many individual ex But they make it clear that in a war on poverty poverty pov- pov erty a holdIng action against inflation must be an important objective I |
