Page:Economic Reform Policy by Envoy Dodge (Dodge Line).pdf/6

 Some salutary anti-inflation readjustments and developments are not only necessary but desirable for the longer run good of the Japanese economy. It cannot afford to waste any existing elements of strength and supporting the unrealistic distortions and dislocations of an inflationary trend. A postponed readjustment inevitably will be extremely serious and of much longer duration.

Everyone complains about the high price effects of inflation but wants to keep on getting his own slice of government funds. Inflation is always considered bad for other people but individuals want to keep for themselves whatever personal benefits they mistakenly believe arise from it. Increased subsidies, increased wages and increased government expenditures go hand in hand with higher prices to consumers and higher taxes. That is why wage stabilization is a fundamental factor in general stabilization. But while it must be remembered that wages increase by arithmetical progression, prices increase by geometrical progression. The consumer is always the loser.

Inflation burns the economic candle at both ends. The off end belongs to those who are being stripped of the value of their earnings and savings by rising prices. The near end belongs to those who are spending the values extracted from the public. They are spending other people's money.

Political and economic liberation has not increased the supply of goods and services as much as it has the demand for them. The facts are that the spending power in existence is too large for the supply of goods and