The Law of Unintended Consequences:
Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.
As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.
At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.
Just as the laudable goal of Affordable Housing was the genesis of the mortgage meltdown, so is the generous idea of a Living Wage a recipe for inflation rates not seen since the 1970s. A rising tide lifts all boats, and substantially raising the minimum wage, without a corresponding increase in productivity, will inevitably lift other wages as well. With more dollars competing for the same goods and services, higher prices (inflation) will surely follow.
As the dollar loses value, a higher premium (interest rates) will have to be paid for government borrowing. Even if our Nation Debt were to be stabilized at $20 trillion, an interest rate of 5% would take up $1 trillion of the federal budget every year. A 10% interest rate would consume more than 1/2 of the federal budget.
At that point, we will have no choice but to devalue our currency (and standard of living) by 50% just to stay solvent. We should think carefully about these consequences before paving another road to hell.