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INFLATION BREEDS INFLATION
According to U. S. News and World Report, President Eisenhower’s 72 billion dollar budget is not so big after all- This may sound absurd. Seventy-two billions a year calls for spending almost two hundred million dollars per day. But, says U. S. News, Eisenhower’s administration is getting only 32 billion dollars worth of goods and services on a 1940 purchasing power level. The difference between a 32 billion dollar and a 72 billion dollar budget is inflation. Inflation will cost the United States 40 billion dollars in 1957 for Federal government alone, and it will represent over one-half the total national budget.
The high* cost of inflation may dawn on most people as a surprise, but not on the farmer. He has been living with it quite a few years now. While the cost of machinery, fertilizer, and everything else but a coca cola has doubled and -tripled, the farmer’s income has been decreasing. Well does the farmer realize that his 1957 income would have looked awfully good in 1940- But inflation has turned this larger income into less money, actually.
Now the inflationary spiral is catching up with the wage earners in the cities, and with the Federal government. The cost of goods and services are increasing faster than income—just as it has been doing for the farmer for the last five years. What is the solution? Of course no one knowsBut this much is certain: as the dollar is pegged to nothing and the cost of an expanding Federal government increasing every year, the only forseeable modus vivendi is more inflation, via a larger national debt.
B. C. B. Jr
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