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So inflation as the New Deal planned it was bound to be popular. Many were enriched and few were impoverished. Those who have been enriched perhaps could afford to pension or assist the few who have been impoverished, and if this could be arranged, and if it could go on forever, what a world this would be!

The government would never have to balance its budget, debt would become a myth, and nobody ever again would have to worry about money.

Has that the sound of fantasy? Nevertheless, it is the pure logic of inflation.

Some time ago the President's Council of Economic Advisers began to expound the theory of perpetual inflation and perpetual boom. They began to argue that if creditors continued to be impoverished by rising prices, it would be better to relieve their distress by aid from the public treasury than to deflate wages and prices, which would hurt too many.

Thus immunity for everybody—immunity from the monetary effects of inflation, provided by more inflation.

What you get then is an economy moved by jet propulsion through the stratosphere. It must go higher and faster or crash. Deceleration might be fatal. The government cannot afford to balance its budget or to stop deficit spending, because its spending is the gas of jet propulsion.

For how long and how far can it go? To infinity? Certainly not to infinity, quite. Since it cannot go to infinity and since it cannot stop or decelerate without crashing, what can the sequel be?

The answer to that question is already latent in the national mind; and that perhaps is the one fatal fact of all.

We know very well what the sequel will be, and yet we go on dreaming that we dream, which is a kind of psychic device for cheating reality.

The truth of this you may test for yourself.

Many are in earnest when they say that unless people can reconquer government its bigness will swallow them up.

Ask these: "Will you demobilize government? Will you cut it back to the limited functions that were thought proper to government twenty-five years ago?"

They will say: "No. You can't do that."

"Why not?"

"Because in the first place it is not politically feasible to go back. Moreover, with government now spending one-fourth or more of the national income even in peacetime, its new functions are so ramified in the economy that to abolish them would strip the gears. But it must stop growing."

Then ask: "What new function of government would you stop the growth of?"

The answers to that will be vague, desultory and irrelevant. Each new function of government has its own powerful clients and beneficiaries, wishing only for it to grow.

Many are sincere who say the dragon of inflation must be overcome, else we are ruined. But if you press them you will find that they do not want to slay the dragon; all they want is to chain it down.

Ask them—let it be a banker, a merchant, an industrialist— ask them: "How much depression and unemployment are you willing to face as the price of deflation?"

The answer will be: "It is not deflation we are talking about. We are saying that inflation must stop."

"You are proposing then to let all past inflation stand and to stabilize at the very top the greatest inflationary boom that has ever occurred in this country?"

The answer will be: "It is better gradually to absorb the consequences of past inflation than to have deflation."

Say to them: "By your own definitions, inflation has a kind of momentum; it feeds on itself and is self accelerating.

Therefore to stop it suddenly may cause a depression and unemployment, because for the expectation of continuously rising prices you substitute all at once the notion of static or falling prices."

They will say: "That was once true. But now it is possible to stop inflation without having to face deflation, falling prices, reaction or unemployment."

"Why now is that true for the first time in economic history?"

"Because the government has learned how to intervene to keep the economy in a state of equilibrium."

There is your answer—the fatal answer latent in the nation's mind. The government will intervene. The government will be responsible.

What are these new responsibilities of government? Look at them. The government now undertakes:

(1) To keep an ever-expanding economy in a state

of equilibrium. (The perpetual boom without mishap.)

(2) To maintain full employment in any case.

(3) To provide all the buying power the people need,

even by inflation.

(4) To maintain the national income at any optimum

level and to see that it is properly distributed.

(5) To provide for the poor, the old, and the unemployed,

if there are any unemployed.

(6) Necessarily, therefore, to prevent deflation,

which means to say that it undertakes to see that the

price of a boom shall never be paid.

Now if and when the signs of trouble appear, what will the government do? What will the people expect it to do?

It will undertake to discharge its new responsibilities. To do that it will be obliged to take control of the entire economy, as the New Deal tried to do in the first one hundred days of the revolution and as it would actually have done but for a sick chicken on the New York poultry market, which was the cause of bringing the National Industrial Recovery Act before an unreformed Supreme Court. There the Blue Eagle was killed. But what reason is there to suppose that a second Blue Eagle would suffer that fate at the hands of a reformed and liberalized Supreme Court?

What the New Deal planners tried to do was strange and sudden. What the government will do in the next crisis is pre-determined.

And when this end has come to pass not only will we be through with the fiction of free prices, free markets, free contracts, and free enterprise; we shall probably be through also with inflation. A government that has arrived at the ultimate goal of total power may dispense with inflation. The power to command obedience enables it to achieve directly what formerly it could only achieve indirectly by inflation.

The consuming delusion is that because of what Americans were, this may not or cannot happen.

By a long lure of planned grass a society of bisons may be decoyed to captivity in the Valley of Security.

In moments of uneasiness its bulls may be soothed by the voices of the herders saying: "You are free at any time to go back to the plains. Remember the grass there? It was poor and many of you were hungry."

There is no going back, because, first, these gentle herders are rough with the few who try to start a stampede, and secondly, tame grass is sweet poison. From the eating of it the way of life on the plains is soon forgotten. To many whose stomachs were never so full before, even the memory of it is harrowing. If one asks, "But will the herders always be good to us?" another answers, "Nature was sometimes cruel."