76-18-B5
- Main Page \ Reagan Radio Commentaries \ 1977
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Inflation[edit]
Transcript[edit]The French have a saying for it, "The more things change, the more they remain the same." Do you suppose the Frenchman who first said it had Washington in mind? We are enduring the longest period of "inflation" in our nation's history and something else we've never known before -- world-wide inflation. Solemnly, high officials in every nation talk of the need to do something about it. But, what they end up doing -- in the name of stimulating the economy -- is to make the average citizen the patsy in an economic shell game he doesn't understand. Very simply, government votes to go on spending as much -- but usually more -- than it has been spending. At the same time, using terms like such as "stimulating the economy", "increasing employment" or "providing more for the unemployed", it creates an illusion of effective action. It proudly proclaims it has pumped more money into the economy. And it has -- printing press money. In the last 10 years our government has -- by simply running the printing presses at the Treasury Department -- increased the supply of money in circulation more than four times as much as the increase in goods and services available for purchase. We foolishly feel richer because we have more money. But then, we discover prices have gone up. We call it inflation and get angry with the storekeeper, the manufacturer or even labor. Here we just got rich and those greedy so-and-so's are going to make us poor again. It's that word inflation that does us in. In these 10 years when the money supply has increased 112% and the goods and services for sale have only increased 24%, they have devalued our money by 44¢ on the dollar. Prices haven't gone up. Each newly printed dollar should read "66 cents". And that's only compared to the dollar of 10 years ago. Think what it's worth compared to those dollars we had in 1939 or even 1956 at the end of the war. Rising prices don't cause inflation. Inflation is the cause of rising prices. It would be more honest and less confusing if they'd quit talking about the cost-of-living index and simply tell us by how many pennies and nickels and dimes they've reduced the value of our money every year. Of course, if they did that we'd probably quit going along with the shell game. Why does government play this game to begin with? Well, it allows them to spend money they haven't had to raise taxes to get. They can get away with it because, unlike raising a tax, our money is whittled away a few cents at a time. And, when we do catch on we blame -- as I said before -- the wrong people. And, of course, the politicians help us blame the wrong people. Along about vote buying time they come over the hill like the cavalry with all kinds of plans for protecting us from venal and greedy profiteers; consumer protection agencies, more regulations, and even price control. All of which makes them look like heroes saving us from the bad guys. If we look back at even fairly recent history, we'll see that -- whether the politicians intended it or not -- when inflation reaches a certain point nations go totalitarian. Socialism or Fascism takes over and they are virtually the same thing. At the recent London Economic Conference one of our officials declared inflation to be caused by many things and therefore requiring many cures. If he really believes that he had no business being there. Inflation is caused by one thing -- government spending more than government takes in. It .will go away when government stops doing that. This is Ronald Reagan. Thanks for listening. |
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