"Ordinary tyranny, oppression, excessive taxation - these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies and the robberies committed by depreciated paper."

That's how Daniel Webster felt about inflation in 1832. And he never witnessed the damage double- and triple-digit inflation can inflict on a standard of living in this 20th century world.Yes, I know. The inflation rate hasn't gone anywhere near double digits the last couple of years. We've enjoyed 1 or 2 percent inflation recently, and this year 4 or 5 percent is likely to be the case. During the last 10 years the average annual inflation rate has been just over 6 percent.

Could that be a problem? How could that hurt us?

Well, let's say that you are now 35, earning $5,000 a month, working for a Fortune 500 company with a great pension plan. An analysis shows that if you stay with the company until 65, your monthly pension will be $3,400.

"Not bad," you say. But how much will that pension be worth then?

If the same 6 percent annual inflation rate continues over the next 30 years, your $3,400 monthly pension will be worth only $514 per month in today's dollars. And that is only the first year. When you turn 75, it will be worth only $273 a month. Can you live on that?

To put it another way, to maintain the same standard of living at retirement as you enjoy today, you will have to earn $33,078 a month - and that's if the inflation rate stays put. A dozen eggs will cost $9.92, a quart of milk will be $5.88, a Jeep Cherokee with no frills will be $132,280 and a 25-cent phone call will be $1.65.

Let's say you have a 401 (K) plan that shows that by the time you retire you should have about $300,000 stashed away. That capital, at age 65, will have today's value of $45,355.

If you are close to retirement now and have saved either $500,000 or are about to sell a business that will bring you that sum, you are probably wondering how long that money will last on an inflation-adjusted basis.

Well, here it is: if you want $4,000 per month, and you are in the 28 percent tax bracket and earn 10 percent on your money (which is pretty good) you will run out of money in 11 years. If you need $6,000 per month to live, the $500,000 will vanish in seven years.

Frightening? You bet!

Ronald Reagan said when he began his first term as president, "We know now that inflation results from all that deficit spending." He then proceeded to run up the most astronomical budget deficit in the nation's history. Following his reasoning, will his legacy to this country be the worst bout with inflation in our history?