Price Stability and Economic Growth

2. Inflation tends to injure low-income groups somewhat more than the upper income or even the middle income groups. Theoretically this should not necessarily be so, but it works that way because lower income groups cannot, or do not know how to, protect themselves as do people at higher income levels. For example, in several public opinion polls, people have been asked how they think they can best protect themselves against inflation. A surprisingly large number reply that the best way is to invest in government bonds. This view may make the Secretary of the Treasury happy, but it does not make good sense as a hedge against inflation. Answers of this sort come much more frequently from low-income respondents than from those at higher income levels, who are generally more sophisticated financially. Another common answer from those with low incomes is that protection can be provided by saving more and by getting out of debt, where-