Interest rate hikes will only hurt innocent bystanders

The Federal Reserve system is doing the only thing it knows how to do: beat the little guy over the head with higher interest charges.

The average Joe doesn’t cause inflation, and punishing the little guy isn’t going to cure inflation.

If we could circumvent the filibuster in the Senate, Congress could start giving tax credits back to poor families with children. This reduced child poverty by about 50%, but the program was temporary. It should be permanent.

The government should reward the poor and middle class who pay their taxes by paying each taxpayer an annual subsidy of an amount to be determined. It would undermine the underground economy and reward honesty.

The Biden administration is pushing a $1.3 trillion reduction in our budget deficit, something so huge and so sudden that it undermines the economy. The Trump administration has pushed deficit spending, partly as a way to stimulate the economy and the stock market (two very different but related things).

The inflation we are experiencing is the result of the Russian invasion of Ukraine and how it disrupted our oil-based world.

Raising interest rates will do next to nothing for people who are wealthy enough to pay off their credit cards every month or who rely on debit cards.

The Fed is all about the people who are least responsible for inflation. It is indefensible. This reflects a remarkable misunderstanding of the situation by those who are supposed to know the most.

The oil bubble is temporary and is already collapsing. Maybe the Fed didn’t notice. The cost of all shipping is down (other than the US Postal Service, it seems). This collapse will reduce inflation.

Allowing the federal government to negotiate drug costs would also be helpful. And that would help people, unlike higher interest rates that might work, but only by inflicting unnecessary suffering on the most innocent victims of inflation.

If the government has few tools to control inflation, it should start subsidizing the people who are suffering the most and who have contributed the least to the problem.

Joe Galu lives in Albany.

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