From: visser@convex.com (Lance Visser)
Subject: Re: Double-Digit Inflation - The Real Story
Date: Mon, 14 Dec 1992 21:14:24 GMT
Organization: Engineering, CONVEX Computer Corp., Richardson, Tx., USA
X-Disclaimer: This message was written by a user at CONVEX Computer
              Corp. The opinions expressed are those of the user and
              not necessarily those of CONVEX.

In <1992Dec14.174745.3017@m5.harvard.edu> borden@head-cfa.harvard.edu (Dave Borden) writes:

+>A popular prediction among Republican "doomsayers" is that with a Democrat
+>in office, we'll have double-digit inflation like we did under the last
+>Democratic president, Jimmy Carter.  I've been doing some reading, and have
+>discovered that the real story is somewhat different than the Republican
+>die-hards would like us to believe.

	Its too bad there are moronic party hacks like you around to spread
yet more disinformation.



+>The roots of the large inflation of the seventies date back to the Nixon
+>administration.  Nixon, pressured by dwindling gold reserves, took the dollar
+>off of the gold standard in 1971 and announced to the world, in effect, that
+>the dollar was backed only by our word.  Having no commodity limiting the
+>money supply, the printing presses started to roll, the money supply increased
+>faster than was appropriate for our level of economic growth, and inflation
+>began to rise.  Inflation rose constantly, peaking under Carter at over
+>13 percent in 1971.  The trend of an increasing rate of inflation was one
+>which started in 1971 under Nixon and ended in 1979 under Carter.

	And Arthur Burns at the FED, Wage-price controls, explosive federal
spending and several oil shocks had nothing to do with it right?  Its all the
"gold standard" right?  Sorry to also tell you that what your calling a gold 
standard was nothing of the sort.


+>Why did inflation drop?  In October 1979, during the Carter presidency, Paul
+>Volcker, newly appointed Chairman of the Federal Reserve Board, stopped the
+>printing presses.  Disinflation (slow-down in the rate of inflation) occured,
+>and along with it the unfortunate but necessary temporary softening of the
+>economy and increased unemployment which must accompany any lessening of
+>inflation.

	That "necessary, temporary softening" of the economy lasted until 
1982. The other choice that Carter had was cutting government spending 
back significantly.  He decided to let government spending and the income
tax burden grow while the fed pushed up interest rates.




+>Hence, an examination of the facts shows that the root cause of seventies
+>inflation was actions on the part of the Nixon administration, and that it
+>was during the Carter administration that the necessary remedy for inflation
+>was enacted.

	Hence, an examination of the facts by you leads to a rewriting of
history from the point of view of the democratic party.  "evil" republicans
and "noble", hard-working democratics.

	Sorry, but in the real world there is more than enough blame to 
fall on everyones sholders and it would be better for everyone if you 
party hacks would start thinking about solutions rather than trying to 
portion out blame.

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