Contradictions of Monetary Policy

Thank you for James Risen’s clear explanation of the Federal Reserve Board’s monetary policy (“A Plea for More Flexibility on Monetary Policy,” View From Washington, Oct. 20) and the thoughtful questions he raises.

I’m concerned by the contradiction between the Federal Reserve Board’s insistence that the unemployment rate must not go below 5% to 6% and the recent legislation requiring welfare recipients to go to work within two years and capping lifetime benefits at five years. How can the economy absorb the new low-wage job seekers if it can’t absorb the unemployed people already seeking work?

The pioneers and farmers could raise livestock, grow food, hunt, fish and gather fuel. They could build their own shelters from available materials. How can people living in cities meet their basic needs if they can’t find work?

What effect will these policies have on the crime rate and the tax burden? It costs an average of $21,881 to keep one person in prison for a year in California in 1996, and the public must often assume responsibilities for his/her dependents. Welfare and food stamps currently cost $5,364 a year for a mother and two children.

Most important, what will the effect of these policies be on children? We are a very wealthy nation, but 20% of our children are living in poverty. Is this necessary? Is it good for the future of our country?

Isn’t it time for a reality check? Isn’t it time our decision makers got together and organized the problems with our economy more effectively?

VIRGINIA LOUAILLIER

Woodland Hills