The Problem of Inflation

Abstract

Many persons have recently expressed great con cern over the problem of inflation. The President has warned repeatedly against its dangers and a Cabinet Committee has re ported that action is needed to forestall inflation and assure sustained economic growth and social progress. Inflation in volves rising consumer prices under conditions of so-called "full employment." Many explanations of inflation have been offered, but whatever the cause, the consumer bears the brunt of it, and it unequally affects the population. The price level flattened out during the 1957-58 recession and has recently shown signs of advancing toward new peaks. Some persons regard inflation as no real threat in peace time and may even think it is a necessary price of continuing economic growth. It is more difficult to arouse the population to the evils of in flation than it is to the dangers of recession and depression. To halt inflation it is necessary to curb excessive spending by governments, businesses, and consumers until the supply of de sired goods and services has become adequate. It may also be necessary to increase taxes and apply other controls which are unwelcome. Reasonable stability of prices must be accepted as a national goal along with reasonable economic growth and social progress.