Inflation "Targeting"

What if the Fed set a goal for themselves to contain inflation at 3%?

Let's assume (and this is a huge assumption) that government can control its spending to the point where 3% inflation is maintained.

Is this the ticket to success?

Well let's see:

• Artificial booms would still exist.
• Businessmen would still be mislead into thinking there are more savings then actually exist.
• Business calculation would still be distorted.
• Since the booms would contain malinvestments, those malinvestments would have to be liquidated....so busts would still exist.
• There would still be a transfer of wealth from the poor to the rich.
• There would still be an exchange of nothing for something.
• Savers would still be penalized...and debtors rewarded.
• Speculation (in order to stay ahead of inflation) would still be encouraged.

So is inflation "targeting" the answer?

I say no.