DEFLATION THREAT?

Physician's Money Digest, August15 2003, Volume 10, Issue 15

While Alan Greenspan wrestleswith the possibility of deflation, therest of the nation may be wonderingwhat he's worried about. Eventhough the inflation rate is nearly instasis, prices on many goods and servicesare going up. Consumers arelooking at double-digit increases inhealth insurance premiums andincreases of around 14% in the costof prescription drugs. Overall, thecost of health care is rising at 4 timesthe inflation rate. Tuition at privatecolleges is up 5.6%. Heating withnatural gas is costing you 21.4%more than last year. Homeownersinsurance is up 6.4%, and auto insurancehas risen by 7.6%. The list goeson, from haircuts to cars to cable TV.And despite the federal tax breaksrecently signed into law, many peoplewill see their overall tax bill go up asstates and municipalities struggle toclose budget gaps.