| Show U S so dollar devalued 40 percent in power in ten years li is tt firs of at two 0 how bow il a works a hi in fulbri ss v of by be amelly Eco meades bam of 01 till company in these hectic day days fresh alarms and fresh problem flare up both here and abroad crowding each other through the spotlight seldom is there time enough to think each problem through meanwhile inflation creeps quietly on down underneath it chisels every pay envelope every savings account it undermine undermines ever every pension program elezi every plan for future security it weaken weakens our ability to d deal 2 with th all U our other er i problem problems b both 0 t h at bom home and abroad though inflation has ha gotten badly mixed up in politic politics no on one party has ha a monopoly on the th blim blame for or it it group groups and individual individuals belonging to all our important political parties have contributed to our ow present inflation menace usually with the beit beat of intention intentions buying power down inflation need needs to be thought through now regardless of 0 politic politics and in spite ot of all other distractions for we like britain and prince france and many other nations now have the th inflation habit AJ As citizens ot of a democracy we mut must all share the blame as a well ai as take the consequences quen ces if we do not find a cure oar our own dollar hai has been d devalued e 40 46 per cent in actus actual ll 11 baying buying power since 1938 1031 the who white haired coupler couple existing ea old age assistance the aide elderly ir worker retired ea on a pe aalen or widow trying to keep her tam am uy together en on social security and her husbands sartor savings these can testify whether inn thou has ha whittled down their a comfort and AM heir their security to at how and why the inflation process goes on and on we must first stop lone long enough to realize ize the nature of money and why it grows TOW or shrinks in buying power money Is I 1 only waste paper tinier unless there are thine things to buy bur without thing things to buy it it Is as a worthless aaa asa batcheck bat hat check when there are no do hati hats la in the checkroom thing things to buy cr or goods as the economists call thern them result from work and production money an enable bles the tanner tamer in minnesota to trad trade a gallon ot of milk tor for canned conned pineapple from hawaii or fresh orange oranges from florida the money that pane passes through many hand hands to make these trade trades possible wealth nor doe does it create a standard of living the m milk lk the pineapple and the orange ranges are the wealth and the standard of living it is production ox of these things that make makes the US dollar valuable and makes the american standard at of living so 10 high in 0 ne wilary d meire h 16 hatlon nation it was not uncommon uncommon tor for a Irick collie to 10 cam earn million chines chinese dollars a week but he be often had buying enough food with his basket baskets full of money to keep from starving there were lot lots of at dollar dollars being poured out by government ern arn ment but not much food being produced or marketed though the peoples dollar income incomes increased fantastically this did not raise their living standard it merely devalued de do valued their dollars the inflation that Is nibbling away at our dollars and our pensions and our future security is not the runaway printed money inflation that afflicted china instead it is a creep big his gradual credit inflation that is far harder barder to see heres an ulus illus of how bow it works money supply trebled our government borrows a million dollars from rom a federal reserve bank to meet some of its expenses the US treasury gives the bank a not note or bonds lor for a million dollars the bank simply marks up a deposit of a million dollars to in the oam name of the US treasury and keeps uncle sams promise to repay the loan as security the treasury then than writes checks on that million dollar bank account until it Is all paid out tor for road building pensions airplanes public housing hous lne salaries ot of government employees the total bomber member of dollar culm ticket in circulation Is increased by a million fust just aa as surely as if it the government had printed op up a million dollars in crisp new Creen greenback backs and had bad spent that money instead uncle sams checkbook dollars are deposited by individuals and business concerns in their own bank accounts they write bew checks cheeks as they pass the dollars 0 on th the million dollars stays in circulation n until uncle sam repays his loan some of the people who receive ane me bank checks cheeks will probably want wa t actual greenbacks green backs for or them any federal reserve bank can print up new paper money using that same million dollars IOU of uncle sams as security with only 25 per cent gold sold reserve required under the th present law now to see just what has his nap bap A Q I 1 98 al 16 e T rm 1310 the its above chart prepared pre pred by the th family economics bureau of northwestern natto ml life insurance company bow clr clear ly 17 why you delta has shrunk to 51 cents worth bened to ur the purchasing power of t the dollar in 1939 we had a little under 33 billion dollar dollars of this chack book boor money and a little over 1 seren seran billion dollar dollars of coins and p AV money a total money sup apply PW ct of 40 billion dollari dollars in 1930 1939 by late ika 1949 we had 93 03 bil millicia licia dollari dollars of checkbook money and 27 billion dollar dollars of coln coins and paper piper koneya total money supply of billion dollar dollars in 1949 1042 this la Is juit just three time times ai as many dollar claim ticket for or good goods ai as were outstanding in 1939 but our production of good goods hal has increased too though it trebled like the money supply ci ol even double dIt ba has increased about 70 per cent production fights rights inflation if there were DO no more dollari dollars in circulation today than in 1939 each dollar would be a claim tot for about 70 per cent more would buy approximately aa as much today aa as would buy in 1939 but there are three times aa as many MIMY dollar claim tickets outstanding tal today so each dollar can claim only about a third as much A third of would be about 87 57 centi cents actually we have about a 69 59 cent dollar today compared with iti its IM 1939 buying power it it for the increase la in production of goods bur tur rear wealth we would about a 33 cent dollar today about three fourtha of the SO 80 billion deuan dollars added to t our nr money many supply from fin IM 1939 or about 00 0 billion dolla rha has been doe due to government borrowing from banks most of this borrowing was done to help finance the war another 17 billions bimo rig or nearly at the remainder of the increase hn has been due to business borrowings to build new plants buy new machinery finance larger stocks of goods such business borrowings wen were temporarily inflationary because when they were paid out tor for construction st wages materials etc they boosted the number of dollar claim tickets outstanding against our total stock ot of things to buy but is as soon as the new factories actori ei and the improved machinery got into production they greatly increased the supply of consumer goods and thus offset the increase in the number of dollars outstanding the government borrowings however did not increase production at of consumer goods the 98 those borrowed dollars were spent tor for either went up la in smoke during the war or were mostly junked bunked after the war the borrowed dollars are still with us at pure inflation from the latest official estimates our government Is now spending over five billion dollars more than it takes in in the current year As previously pointed out this means that live five billion borrowed checkbook dollars are gradually added to an already existing money sup ply of 0 about billion dollars if every other influence stayed exactly the same so we could watch this 4 per cent inflation at work all by itself we would fil find d each individual american d dollar 1 I 1 a r gradually watered down about 4 cent cents la in buying p power awer this it I 1 it would take 1 04 to buy as much a bought previously this means about tour cents cent tucked sucked out of each of our old dollon to create five billion bi llon new dollars no new purchasing power has been created the purchasing powei of the new money has been taken I 1 away from all the old money |
