The Inflationary Effects of Government Programs.

The article discusses the inflationary effects of government programs in the United States. It has become quite common to assign the blame for inflation in either of two ways: within the private sector of the economy, business and labor interests have taken turns to bestow upon each other the primary responsibility for the inflationary pressures; within the government sector, the presence of a budget deficit has been taken as the indication of the government's contribution to inflation. With the projected balanced federal budget for the fiscal year 1960, attention to the detailed composition of the budget becomes especially relevant. The possibilities of re-enforcing a budget surplus in an inflationary period by attention to the operation of individual government programs has been relatively ignored. The recent establishment by U.S. President Dwight D. Eisenhower of a Committee on Government Activities Affecting Prices and Costs is a welcome development. According to the January 1959 Economic Report of the President, this new unit is designed to follow the operation of all relevant federal programs and to make recommendations for the administration of these programs in line with the objective of reasonable price stability.