Inflation in One Easy Lesson
For Christmas, my daughter gave me the pamphlet “Inflation in One Easy Lesson,” by Harry Scherman. (Yes, I am that typecast that my daughter gives me inflation memorabilia for Christmas!) It was written during World War II, and distributed by the Council for Democracy. It is so delightfully simple and direct, and makes the main point so obvious, that I want to share it. It also happens to be, given the current war against Iran, somewhat timely. Here is the cover:
I scanned the whole pamphlet into a pdf, after ascertaining with some confidence that the pamphlet is no longer under copyright as there is no sign the copyright was renewed after the initial period of protection. If you believe yourself to hold a copyright on this material, please contact me at inflationguy@enduringinvestments.com and I will remove the post.
Here is the 22-page pamphlet. Frankly the pictures are wonderful by themselves, even without the text!
Leave a Reply to sarregousetCancel reply
That’s government propaganda for selling war bonds. It says “the only way we can now beat inflation is not only by as strict maintenance as possible of the present *price and wage controls*, but in addition” by the poor paying up.
It also attacks fractional reserve banking. I thought that was just an Austrian schtick – do you agree with them?
I don’t agree with everything in this, and clearly they want people to buy war bonds. But they give the rationale for it, and they’re right: if you spend, but you borrow it from the people, then it’s the fiscal irrelevance theorem – no more money in the system (of course, depending on who you are taking the money from and giving it to it has SOME effect). But if you spend and can’t tax it or borrow it, you have to print it, and that’s the problem. After all, in our own time the Treasury ran massive deficits for a generation without inflation problems. The problem happened when the Fed started buying all those bonds themselves. Anyway, I don’t agree 100% but it’s surprisingly close. Certainly closer than anything you read from a Wall Street or Fed economist these days!
Seems like the most logical thing to do at this point is to shut down the Internal Revenue System and the income tax. Each month, the government prints 1/12th it’s annual budget and spends it. That way, government spending is financed entirely with inflation. Everyone gets to participate proportionally in government funding, delivering a truly progressive financing system.