CHAPEL HILL -- William "B.J." Lawson blamed Congress and the Federal Reserve on Wednesday for the high price Jamil Kadoura is paying for pita bread.

Lawson, who's seeking the Republican nomination in the 4th Congressional District, said the Mediterranean Deli owner is paying twice what he paid for pita two months ago.

Kadoura said his cost for mayonnaise has jumped also, from $18.50 to $25 for a 4-gallon container.

Gas prices and the conversion of wheat and soybean fields to produce corn-generated ethanol -- "perhaps the dumbest and most destructive farm policy ever conceived by well-connected special interests" -- are driving up some of the restaurant's costs, Lawson said.

But so is a federal government that overspends and gives the Federal Reserve total control over the nation's monetary supply, he said in a news conference at the West Franklin Street restaurant.

Increasing the supply of dollars in circulation has made those dollars less valuable, Lawson argued. So while Kadoura's pita bread isn't any more valuable than it was a couple of months ago, he's paying a lot more for it.

"Congress is responsible for giving our central bank, the Federal Reserve, a monopoly on American currency," said Lawson, 35, of Cary. "People generally think monopolies are bad. Why should we have a monopoly on money?"

A physician turned entrepreneur who left surgery residency to start a hospital software company in 2001, Lawson proposes letting people save, invest and transact business in gold and silver, in addition to Federal Reserve notes without having to pay sales or capital gains taxes.

It's an interesting idea, two economists said last week, though they disagreed with Lawson's premise that the Federal Reserve has put too many dollars in circulation.

"We overprinted money dramatically in the 1970s," said James F. Smith, a professor in the business school at Western Carolina University and formerly of UNC. "To say that we have a big inflation problem over the last decade, I think, would be wrong."

"There are a lot of reasons why the value of the dollar is declining, but overprinting money isn't one of them," Smith added. "No one can predict foreign exchange markets."

John Coleman, an economist at the Fuqua School of Business at Duke, agreed the Federal Reserve has printed too much money. But he said having a central bank stabilizes currency and that policy reversals since the early 1980s have gradually decreased inflation.

"The dollar is less valuable, but there is no indication it's less valuable because of inflation in the United States," he said.

In an e-mail, U.S. 4th District Rep. David Price blamed gasoline prices for straining both family budgets and businesses.

"This reflects the Bush administration failure to prepare our economy for higher fuel prices with an energy policy that reduces our reliance on oil and supports alternative energy development," he wrote. (See Price's full response on the OrangeChat blog at blogs.newsobserver.com/orangechat.)

Lawson's Republican opponent, Augustus Cho of Chapel Hill, also doesn't think inflation is a problem. He said Lawson is parroting GOP presidential candidate Ron Paul, who says the greatest threats facing the United States are deficit spending and currency devaluation.

"Inflation is low measured against the Consumer Price Index," Lawson acknowledged. But he says the CPI formula is flawed and the standard of living of many Americans indicates otherwise.

"Ask yourself, 'Has my grocery bill been going up more than 4 percent [a year]," Lawson said. "Yes it has."

"I expect disagreement here," he added. "There are a lot of schools of economics. You can get five economists in a room and get six opinions."

Kadoura, the restaurant owner, is not an economist. He's also a Barack Obama supporter.

But at Lawson's Wednesday news conference, Kadoura said his rising costs worry him.

Some customers stop coming when prices go up, so for now he's cutting into his profit. In the long-term that could affect his employees.

"We are a busy restaurant; we are lucky," Kadoura said. 'I'm sure some other restaurants have experienced that. I hope it will not come to that point [here]."