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Show WHAT'S wrong with this picture? pic-ture? Wage increases are promptly labeled "inflationary" while price increases, with living costs now at highest point in history, his-tory, are "gently chided." Agricultural surpluses, instead of being used to provide adequate jiets for millions of underfed Americans, and for starving people peo-ple in other nations to strengthen Ihe free world, are beir.g used as a pretext for forcing farmers into poverty. The President's budget adding up to a record $71.8 billion and on a par with wartime budgets, in terms of a 1958 dollar, would total only $30.8 billions of goods and services in terms of 1940 dollars. Comparatively, in 1940 farmers spent $6.7 billion in cash on the operation of farms, while in 1958 they spent $21.7 billion, or more than three times a: much In terms of 1956 dollars. Price increases took the first big upturn in 1953 Immediately after price and wage controls were taken off the economy econ-omy in this administration, and the hard money and" tight credit policy was inaugurated by the Treasury Department, with the Federal Reserve Banking system refusing to put on the brakes, as it had done in the past. In 1957 the American people are paying at the rate of $425 billion bil-lion dollars for goods and services serv-ices which in terms of 1940 dollars would have cost only $194.5 billions. bil-lions. In other words the people pay $230.4 billions which added to the cost of things by inflation. Take taxes Personal taxes back in 1940 amounted to $2.6 billions. Today personal tax alone is running run-ning at the rate of $41 billions a year. President Firenhower has tried to make a case for his super-budget. super-budget. He points out that $41 billion bil-lion goes for defense and that'i not too high a price, to pay for security. But he does not say why an airplane today costs threa times as much as it aid in 1946 or 1948, or why a submarine costs . twice as much as it did seven years ago, or why Atomic Energy costs four times as much a it did in 1950. Economists within the government govern-ment say the reason for this picture pic-ture is the so-called "wage-cost-spiral" bringing about inflation. But inflation, real inflation is only brought about when total domarJ for goods and services far exceeds our productive powers, when tha economy expands at en unusually fast pace, when unemployment is negligible and almost all prices and income spiral upward. But today there is no shortage in anything. As a matter of fact total private and public demand for goods and services is far short of our productive capacities and the upward curve of our growth is flattening out. Soaring prices have not been caused by any excessive demand, nor Justified by higher costs. And some economists out side the government see the causa as due to price fixing and profiteering, profit-eering, which Is cutting into consumer con-sumer purchasing power which boils down to a factor of under consumption of goods and services, serv-ices, rather than over-production. As a matter of fact, due to this under consumption, production rate is on the down-grade rather than increasing. Growth in production pro-duction rate has fallen from 4V4 a year in the 1947-53 period to about 2 from the fourth quartet 1955 to the fourth quarter 1956. |