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rreezing spending ^The United States will bo able to produce no more than $60 billions worth of goods for civilians to buy this year. Even after they get their taxes paid and their war savings bonds bought, the people will have at least $75 billions to spend this year.If nature is permitted to take its course, prices will be pushed right up through Leon Henderson's ceilings until the entire $75 billions is required to purchase the$60 billions worth of goods. ,Nature probably will be permitted to take its course and inflation of sorts ensue because both the President and Congress lack the intestinal fortitude to take the direct and positive actions necessary to hold in check the force of this excess $15 billions of spendable income.The answer, of course, is to freeze, not prices, but spending. That would not only provide a check on an inflationary rise in prices during the coming months, but would create a reserve of public spending power which could be liquidated to prevent a post-war business depression.The business of freezing spending could be performed in a number of ways but the neatest would be through what would amount to the forced purchase of government bonds.They would have to be a special sort of securities which would be given in return for 10, 15, or perhaps even 20 per cent of all present incomes. They would pay no interest and they would not be redeemable until after the war was over. It might be necessary, in the case of those who had accumulated an. excessive amount of these bonds even then, to spread out the repayment terms of them.What would be the effect of such a program? First of all, it would prevent the present excess spending power from bidding up dangerously the price of a limited amount of civilian goods. Second, it would temporarily take away from the average family about the amount it devoted to the good old days to keeping up the payments on automobiles, radios, washing machines, and the Tike.But think what would happen when the time came for all this frozen purchasing power to melt. Millions of families would have the funds to buy for all casb the new cars and the new other mechanical wonders which they had long craved. Better still, the country’s industry would have a virtually limited market to buoy it through the difficult period from military to civilian production.There could be, in such circumstances, a peace boom greater than any war boom the country ever has known- There will be such a boom if the government only gets around soon enough to freezing spendingthrntmh thp fnrr.prt niirr.haRp f VirmHs
Newspaper Details
Hutchinson News
Hutchinson, Kansas, US
Sun, Aug 09, 1942
Page 14
Full Page
Clipped by
Salina P.
KS, USA 08 Jun 2022
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