Massachusetts is a commonwealth and I think four or five others in the United States are too. Is that different from the Puerto Rico commonwealth and how so? I have never understood why these are so.
This is a followup question to one posted in last week's column, explaining the differences between states and territories. Here, in part, is what that answer said:
"Additionally, there are commonwealths, like Puerto Rico, with their own constitutions and greater autonomy than territories. U.S. territories include the Virgin Islands, American Samoa and Guam. Puerto Rico and the Northern Mariana Islands are U.S. commonwealths.
"Under the Constitution, residents of territories and commonwealths do not vote in elections for U.S. president and vice president."
The term "commonwealth" is a leftover from the 1600s and 1700s, when the word meant an organized political community. Massachusetts, Pennsylvania, Virginia and Kentucky are all commonwealths, but when they became part of the United States, they also became states, and have the same rights and responsibilities as every other state under the U.S. Constitution.
Nowadays, commonwealth describes a political unit having local autonomy but voluntarily united with the United States.
Deflation bad for economy
I have seen several articles on the possibility of a deflationary spiral. I am on a fixed income — military retirement and Social Security. Assuming that neither would be terminated or significantly reduced, isn't deflation a good deal?
Yes, fixed income offers protection during a period of deflation — a persistent fall in overall prices. The steady income actually gains in buying power during deflationary periods, just as inflation eats away at fixed-income returns.
But deflation isn't healthy for the overall economy, and it can be very hard to get rid of once it settles in.
During deflation, as companies cut prices to encourage spending, savvy consumers put off purchases in order to get the best deals. This causes declines in corporate profit and revenue, and companies cope by cutting jobs to save on costs. The souring employment market causes nervous consumers to reduce spending even more, fueling the cycle.
On Oct. 3, President Bush signed the Emergency Economic Stabilization Act of 2008, raising the amount in bank and savings accounts that the Federal Deposit Insurance Corp. covers from $100,000 to $250,000 — but only through Dec. 31, 2009. The legislation did not raise coverage for retirement accounts, which is still $250,000. An item in the Nov. 28 Ask the Times column referred to the previous limit.