Ben Stein has three words he repeats again and again on how he thinks we can beat inflation.
"Borrow, borrow, and borrow," says the Los Angeles economist and sometimes TV and movie scriptwriter who once wrote speeches for Presidents Nixon and Ford. ("I wrote about only the dullest subjects -- overhauling the transportation system or Project Independence.")
"There's no way to make money during inflation unless you borrow," he says.
From childhood, we've been told it's wise to save money. But when inflation hits, that doesn't pay off, he says. Low-interest savings accounts are eroded as hard-earned dollars but less and less.
"People have to learn to go against all they have learned and borrow, borrow, borrow" -- though, he cautions, "never, so you will lose sleep. That's more precious than money."
No longer, he says, can we simply put out money in a savings account and sit back. (Recent Commerce Department figures indicate many Americans may already have found that out: The Current savings rate is the lowest in 30 years.)
"Sitting back is suicide," says Stein. "Save only the miniumum you anticipate you will need for an emergency.
"The hopes of millions of moms and dad to the contrary, notwithstanding, you simply cannot get any real money by saving a few dollars regularly out of your salary."
But doesn't so much borrowing fuel the inflation rate?
"Yes it does." But the government, says Stein, has "given up the fight against inflation. If the government isn't going to help you, your employer certainly isn't and you union can't, then you've got to do it yourself."
Stein has put his advice in a new book, "Moneypower: How To Make Inflation Make You Rich" (Harper & Row, 206 pages, $8.95). He wrote it with his father, Herbert Stein, former chairman of the President's Council of Economic Advisers.
Stein once wrote editorials for The Wall Street Journal, but in 1976 he and his sense of humor were lured to Hollywood where he could combine his two big interests -- "money and show business." He's written for two Norman Lear situation comedies, "All's Fair" (set in Washington) and "Fernwood 2Night." None of his movie scripts -- including one for William Safire's "Full Disclosure " -- has been produced, but "they all sold."
Over the years, says Stein, 35, who also writes a twice-weekly column on the economy syndicated to 50 newspapers, he's noticed that the people who get rich "borrow, borrow, borrow all the time. They buy things that go up faster than the rate of inflation."
For the average American adult today, he says, the best inflation-beating buys that meet this criteria "are houses." To keep ahead economically, he advises that you borrow on the equity in your present house to purchase other income-producing real-estate properties.
It's a tactic he has used to help make him financially comfortable. "I've bought three pieces of real estate -- residential homes. One is up fairly well, one less well and one very much more than I expected."
That last home is in the popular Aspen, Colo., resort, where Stein and his wife spend their summers, renting their place out in the winter to skiers. In the past year, he estimates, "That house has risen in value more than my net earnings in the last 10 years.
"If I had taken my advice about a year ago -- with every dime I had -- I would be several times over a millionaire."
While there's always a risk involved, in the case of houses he thinks it is small. The post-war baby boom is keeping the demand for houses high. And while current mortgage interest rates at 12 or 13 percent seem high compared to what they once were, they aren't, he says, with inflation at 14 percent.
Stein, whose book is one of many inflation-beating guides now in the bookstores, disagrees with such gloomy economic writers as Howard J. Ruff, who forecasts "bad years" ahead.
Ruff "see getting by with you life," says Stein. "I'm talking about making money."
In addition to investing in houses, Stein suggests:
Borrowing to finance your children's college education. "It no longer makes sense at all to save for college." By the time they're ready to go, the money "will be worthless." Federally underwritten student loans at 7 percent are "just a steal."
Using credit cards to save money. Buy now on sale and pay off later with dollars that are cheaper. If you save to buy later, the price will have gone up. "Used properly, credit cards are the godsend that consumers need in periods of continuing inflation.
Speculating -- if you've got time, money and guts -- in gold futures and foreign currency. It's a "gamble," he says, where you could win or lose big.