75-04-B6
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Recession vs. Inflation
TranscriptNero fiddled while Rome burned and Congress can't decide which came first, the chicken of the egg. I'll be right back. I've talked at some length on these broadcasts about the need to zero in on inflation and not push the panic button because of recession. Now the leaders in Congress are making it evident that political considerations and not the good of the whole country will determine what they do. Not to long ago, Carl Albert Speaker of the House declared that our problem was sixty percent recession thirty percent inflation and ten percent energy. The simple fact is that there would be no recession if it weren't for inflation. I'm aware that a great many of you were fearful of increasing unemployment and all of us who remember the great depression can't help but react to the gloomy news being fed to us almost daily in the media. Certainly a recession isn't enjoyable and it's miserable for those who lose their jobs because of it but a continuation of the inflation that started to get out of control in the middle sixties can destroy our entire social and economic system. Recession must not be allowed to deepen into depression, but if inflation is to be stopped we will have to sweat out a certain period of recession. Unfortunately some politicians overreact to any increase in unemployment and start looking at the next election instead of the next generation. Senator Hubert Humphrey I'm sorry to say, lost sight of the main target recently on a national television show. He was vehement in his demand that we start fighting recession like day before yesterday. to hear him you'd never know there was any problem at all about inflation. Specifically he was calling for the Federal Reserve Board to loosen the purse strings and as he put it, "Make more credit available." Translated that means increase the money supply, print more money and get back on the inflation doomsday machine. The word for it in Washington is reflation, a handy way of avoiding saying inflation but as one of our finest economists said reflation cannot sustain full employment in the long run except by faster and faster inflation. The Senator said if the fed-that's Washington-ese for Federal Reserve system-doesn't come up with more money, Congress will see that it does. It's this kind of thinking that got us into the mess in the first place. There are signs that we're beginning to control inflation, a drop in interest rates, the rebates on automobile prices, inventories being reduced faster than we'd expected in a number of others. This is not the time to change our game plan. Sometimes it seems as if Congress will do anything to avoid cutting spending or facing reality. fearful of hard times I know some of you've probably written your Congressman or Senators urging some kind of action, well that's what you'll get some kind of action. May I suggest that you write and tell them no more tranquilizers. We want a permanent cure for what ails us and that doesn't mean printing press money. This is Ronald Reagan. Thanks for listening. |
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