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Show Sound Money Should Be Aim Of All Citizens in America Today SOUND MONEY The following article is furnished furn-ished by the bank of Pleasant Grove as an interesting article on "Sound Money" in an effort to let people become acquainted acquaint-ed with banking and money procedures. Since money is a commodity, it has characteristics which we can describe. Money is termed "easy" when there's too much of it, and in this case, the value of each dollar is reduced. That's why too-easy money is sometimes referred to as unsound un-sound money. At the other extreme, ex-treme, when money is very scarce or too hard to obtain, it is described as being "tight." Somewhere in between is stable, honest, or sound money This is the kind of money everybody ev-erybody really favors. It's the kind of money that will have as much buying power next week, next month, and next year as it does today. Thus, sound money becomes the servant ser-vant of the economy, whereas unsound mony often becomes the master. Those who have experienced unemployment and other economic eco-nomic distress in depression and deflation, as well as those who have seen the value of their savings, insurance and current incomes eaten away by ifnlation, understand the damage dam-age that can be done by an unstable dollar. Our goal must be sound money money with a constant value. Nothing less than national security is at stake, for without with-out sound money, we could face ultimate deterioration of the great productive power of America Am-erica the power that has won two world wars, the power that has been made possible by the wise use of our money and other resources. With sound money, Americans Ameri-cans will keep on saving parts of their incomes, and this will make possible further investments invest-ments that will develop more employment and better products prod-ucts for a more fruitful life for all. A prosperous nation, with high levels of employment and production, can only be assured assur-ed by sound money. Sound money may be said to rest on three pillars. The first is a wisely and effectively managed man-aged government budget. In times of full employment, when inflation threatens, it becomes the responsibility of government govern-ment to adjust its taxing and spending policies so as to check the tendency toward a rising price level. When unemployment unemploy-ment is high and industrial production pro-duction is lagging, it again becomes be-comes the responsibility of government gov-ernment to bring about an increase in-crease in employment and output. out-put. Such responsibility is clearly prescribed in the Employment Em-ployment Act of 1946 which was enacted by the Congress of the United States. Government has sevreal "tools" for use in meeting these responsibilities, the main ones being taxing, spending and borrowing. bor-rowing. However, we should understand un-derstand that an irresponsible policy of running deficits (or surpluses) year after year, without regard to the effect on production, employment, and the purchasing power of the dollar is a harmful and un-ecomic un-ecomic practice.. The second pillar of sound money is a properly functioning function-ing Federal Reserve System. The Federal Reserve can and should use its powers to keep the market for credit orderly and to avoid excesses in the direction of either inflation or deflation. The third pillar is proper debt management. Careless incurring in-curring of indebtedness, whether wheth-er public or private, will lead to financial troubles that may weaken the entire economy. To-' To-' tal (net) indebtedness in our country in 1965 exceeded 14 trillion dollars. The net Federal Feder-al debt is now more than $270 billion. State and local government govern-ment debt together amount to about $93 billion. Total private debt, including that of corporations, corpor-ations, amounts to almost $900 billion. The state and local portions por-tions are increasing most rapidly. rap-idly. The federal portion is increasing in-creasing least rapidly. When wisely incurred for constructive construc-tive purposes, borrowing is a boon to the economy. What can you do to help achieve sound money? 1. You can limit your demands de-mands on the government for all kinds of additional and selfish self-ish benefits, which might cause the government to spend more at a time when inflation is threatening. 2. You can indicate your desire de-sire to have both business and government operate with increasing in-creasing efficiency and with full respect for sound economic policy. 3. You can spend your own incomes prudently, save wisely and produce efficiently. |