The a B C of Inflation, with Particular Reference to Present-Day Conditions in the United States

The a B C of Inflation, with Particular Reference to Present-Day Conditions in the United States

The a B C of Inflation, with Particular Reference to Present-Day Conditions in the United States

The a B C of Inflation, with Particular Reference to Present-Day Conditions in the United States

Excerpt

In the sphere of economics the strongest and most widespread popular conviction in Europe resulting from the First World War was that serious inflation was a terrible scourge and should never again be permitted. Nonetheless, today, in a Second World War, less than a quarter of a century after the Treaty of Versailles, not only most of Europe but nearly all the rest of the world is experiencing substantial inflation and it is progressing rapidly on much the same lines as it did in the early years of the First World War.

Epitomized in a few words, the outstanding reason is that, in time of war, prodigious sums of money must be raised quickly and with a minimum of public resistance. This inflation does, but it does it only at a heavy cost financially and in public welfare. The penalties are heavy but they are postponed. Financing a war largely by inflation is usually the line of least political resistance. The resort of a nation to financing by inflation has often been compared to the resort of an individual to opium smoking. The first sensations are pleasant, but the more one takes, the more he wants. The appetite grows by what it feeds upon; the more one indulges the weaker become his powers of resistance.

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