Letters to the Editor

Readers write about inflation, tax havens, and Internet speeds.

Slow the growth of America's money supply

Regarding your June 9 editorial, "Had enough of high prices?": The article fails to take the real cause of inflation into consideration – that is, a rise in the supply of money. It's no small surprise that the Fed stopped publishing M3 monetary statistics in March 2006. That measurement was the single most valuable indicator citizens had to measure growth in the nation's money supply.

Rising prices are the symptom of inflation, but they are not the cause. It's important that people understand the difference between price inflation and monetary inflation.

Monetary inflation (rise in money supply) comes first, the effects of price inflation are felt later.

If we want to get to the real cause of this problem, we have to rein in our unbridled growth in the money supply.

Steven Smith
Colorado Springs, Colo.

Can foreigners evade tax in the US?

Regarding David Francis's June 9 commentary, "With $100 billion lost, US tolerance for tax havens erodes": Here in Panama, sometimes accused as a tax haven, we read these views with some interest.

The piece should have pointed out that the United States is the world's greatest tax haven. Foreigners (except Canadians) invest there in banks and the stock market free of US tax and in total confidentiality.

The US government doesn't even know who the foreign investors are and do not, in any case, reveal their earnings to foreign governments seeking to tax them. Additionally, many US state corporation laws and regulations have virtually no control or oversight and so are tailor-made for laundering money, whether to hide it from US authorities or from foreign government tax collectors.

Something seems very unfair when a nation like the US, with its $13 trillion economy, takes smaller nations – read, competitor nations – to task for their financial policies and regulations that in most cases are nothing more than ones that mirror US practices. This is simply "might makes right," and "do as I say, not as I do."

Robert Raymer
Panama City, Panama

Faster Internet costs more in the US

In response to Tom Regan's June 5 column, "Why do so many Americans have crummy Internet speeds?": I would like to offer the following comment. The low population densities in Canada and Sweden are deceptive. I believe that low population density in the United States is a valid partial cause of the low speed of Internet connections.

In the US, most people live in very low-density suburbs. Relative to the overall land area of the US, there is little wilderness. In contrast, Canada and Sweden have extremely "peaky" population density distributions: most of their populations live in dense cities, and the cities are surrounded by vast wilderness.

The greatest cost to the telecommunications providers is the "last mile," the distance from the last piece of switching equipment to the customer's building. The last piece of nonfiber switching equipment must, for economic necessity, be farther from the home or business in the US than in Canada or Sweden. Naturally, in spread-out US 'burbs, this cost is much greater than in denser Canada and Sweden.

So, while you are right that Canada and Sweden have lower overall population densities than the US, the US population density distribution lends itself to greater costs for service provision.

Laura McMillan
Stuttgart, Germany

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