The Socialist Revival (Continued)

The spending policies of the master Machiavellian in the White House have been anything but restrictive except by the standard of a crazed Keynesian like Galbraith. The reckless deficit spending of the Johnson years had resulted in huge increases in the money supply, which bid up wages and prices.

During his campaign for the Presidency, Mr. Nixon made much of this fiscal irresponsibility. In his acceptance speech at the Republican Convention on August 8, 1968, Candidate Nixon said:

"It is time to quit pouring billions of dollars into programs that have failed. We are on the wrong road—it is time to take a new road . . ."

Later, in a position paper on the economy, the candidate stated:

"In less than five years the Johnson-Humphrey Administration has squandered the inheritance of a decade's solvency." He also proclaimed: "The entire budget needs exhaustive review . . . Some programs. . . must accept less than maximum funding; non-essentials . . . must await easier times; every major program . . must be scoured for economies."

Again, in his position paper, Candidate Nixon blasted the profligacy of the Democrats:

". . . for five years this Administration has refused to keep federal spending within federal means. The total deficit run up in the budgets of the Johnson-Humphrey years will amount to more than $55 billion. This massive deficit has wracked and dislocated the economy . . .

"There is nothing the matter with the engine of free enterprise that cannot be corrected by placing a prudent and sober engineer at the throttle. The old politics of spend and elect have not only worked an injustice on the American people, they have denied America much of its flexibility in dealing with onrushing change . . . "

Over and over again the campaigning Nixon called for LBJ to slash the federal budget, as when he claimed that every day President Johnson put off cutting the budget "places in greater jeopardy the entire international monetary structure."

Broadcasting over CBS radio on April 25, 1968, Mr. Nixon claimed that "only by cutting the federal budget can we avert an economic disaster . . ." In Dallas on October 11, 1968, he declared that "America cannot afford four years of Hubert Humphrey in the White House," because Humphrey had pushed for programs which would have caused "a spending spree that would have bankrupted this nation."

After the election, all of the laudable rhetoric and soulful promises were conveniently tossed into the memory hole. The fiscal mismanagement of which candidate Nixon had spoken so articulately was truly monumental. LBJ's last budget of $183.7 billion represented an increase of 88 percent during the Kennedy-Johnson years. LBJ boasted as he prepared to leave office:

"Outlays for major social programs will have risen by $37.4 billion, more than doubling since 1964. This is twice the rate of increase of outlays for any other category of Government programs."

According to columnist Charles Bartlett, JFK and LBJ had expanded the number of the government's domestic spending programs from 40 to 473. Most Republicans had resisted every one of the 433 added socialistic programs. "Reckless spending," shouted Republican Congressmen; "dangerous fiscal madness," echoed Republican Senators.

During the waning days of 1968, LBJ prepared a well-padded fiscal 1970 budget to be handed to Nixon. In its January 25, 1969 issue, an angry Human Events lamented:

"To make things more difficult for Nixon on the domestic front, LBJ has tried to spread the myth that Nixon somehow has a moral commitment to carry out the programs of the "Great Society."

"As a gesture of bad will, Johnson whipped up a $195.3-billion "exciting" budget for fiscal 1970, with spectacular increases called for in such things as model cities, housing, foreign aid and the almost totally discredited anti-poverty programs . . . "

Charles Zwick, LBJ's Budget Director, said of the budget prepared for Nixon: "We've tried to keep the momentum in key social programs." The Wall Street Journal of January 16, 1969, described Mr. Johnson's budgetary bequest to Mr. Nixon:

"Altogether, Mr. Johnson's budget slates an $11.6 billion rise in outlays, more than twice as large as the $4.8 billion increase that's expected to bring the current year's spending total to $183.7 billion. The major changes reflect his own priorities, White House aides say."

LBJ's priorities became Mr. Nixon's priorities. Nixon originally cut the budget to $192.9 billion, which was still $8.1 billion more than the budget for fiscal 1969, $14 billion more than Johnson spent in fiscal 1968, $34.5 billion more than he spent in 1967, $58.2 billion more than he spent in 1966, and over $100 billion more than the Eisenhower administration had spent in 1960.

The $8 billion increase (which by the end of the year was closer to $15 billion) was touted as "budget cutting," on the basis that it was slightly less than what LBJ had proposed. (And LBJ could have proposed anything he wished, since he was leaving office.) In the end Nixon's budget turned out to be bigger than LBJ's proposals. Now, with the frugal Republicans controlling the White House, last year's profligate expenditures became this year's bare-bones budget. It all depends on whose gang of socialists is doing the spending. The Indianapolis News on January 17, 1969, said that references to the budget as tight

". . . would no doubt bring tears of laughter to the eyes of American taxpayers if they were not already shedding tears of pain.

"In point of fact, the budget is a monument to waste and to the spending psychosis which has hit Americans with high and rising taxes and inflicted on them a spiral of increasing prices that keeps everyone running at top speed to stay where he is.

"This budget should not only be cut, it should be chopped to the bone."

For all the oratorical bunkum during the campaign about cutting spending, RMN and his advisors never intended to roll back the Great Society programs that were causing the problems. Richard Janssen wrote in the Wall Street Journal on October 21, 1968:

"Progress toward budget balance could be much faster if Mr. Nixon would rapidly dismantle many Great Society spending programs, but his advisers vow this won't happen. 'There's no concept of undoing anything —it's part of the fabric and leave it be,' Mr. [Pierre] Rinfret stresses . . . "

In fact, the GOP could hardly wait to expand the Great Society. On July 16, 1969, the Wall Street Journal's Alan Otten revealed:

"Only Vietnam-induced budget pressures seem to be deterring the Nixon Administration from proposing still larger Social Security benefits, far more spending on education and health, a far more sweeping war against hunger. Even the most conservative approach now being considered at the White House for new welfare legislation represents a major expansion of existing Government programs . . ."

And super-Liberal columnist Clayton Fritchey, a former Democratic Party official, gasped in the September 1, 1969 Washington Star:

"Despite talk and pledges of economizing, budget-cutting, and curtailing the federal government, the Nixon administration is, in fact, headed for the greatest spending spree in the history of our country. The planned expenditures are on such a vast and unprecedented scale that nobody, including the Budget Bureau, can presently make a reliable estimate of what they will add up to before President Nixon completes his term in 1973."

It's the Great Society (a slogan borrowed from the title of a book by English Fabian-socialist Graham Wallas) in elephant's clothing.

Keep in mind that these gigantic increases are coming from an enormous base in which per capita taxation is already $975 per annum. The average working man labors two hours and forty-three minutes a day all year just to pay direct and hidden taxes.

The President was not going overboard to set an example. One of his first acts was to accept a $100,000 pay increase, doubling his salary. Congressman H.R. Gross observed: "I don't see how we can increase the President's salary by 100 percent and claim to be setting a goal of austerity and frugality . . ."

The President was not in dire need of money. In addition to a $50,000 tax-exempt expense account, the President already received operating expenses for White House entertainment, the cost of his plane, travel expenses, and so forth from a special contingency fund. And at the same time Congressman Robert Taft told his fellow legislators: "Until we move toward a tax reduction and a truly balanced budget, we shouldn't even talk of congressional pay increases." But the President did not veto either the generous raises Congress voted for itself or his own pay increase.

The Wall Street Journal on March 10, 1970, revealed that spending by the White House had doubled from $70 million under LBJ—never known as Mr. Frugal—to $140 million under RMN.

According to the Indianapolis Star of April 29 the same year:

"Seasoned observers believe that Mr. Nixon has the most expensive White House staff arrangement in history.

"In the new budget presentation, the President's traveling expenses are up 87 percent, travel and transportation of staff is triple this year's, communications and utilities are up 43 percent, printing and reproduction has more than doubled and supplies and materials are almost double.

"The total number of permanent positions on the White House staff listed for the new fiscal year is 548. The estimate for this year was 250—the same number that served the last six months of President Johnson's term and the first six of President Nixon's.

"The Budget . . . does not account for a tripling of the National Security Council budget, pay for service personnel who tend the grounds, military assistants, presidential aircraft, including helicopters; the biggest part of the communications operation, the White House police and Secret Service staff. Coast Guard patrols off the vacation White Houses, General Services Administration housekeeping, and printing done by other departments."

Congressman Sam Gibbons ticked off some of the President's more lavish expenditures:

"The people may begin to wonder why he did not say "No" to an $830,000 expenditure of tax money to plush up his airplane, already the plushest plane in the world. The people may also wonder why he did not say "No" to the construction of a $350,000 helicopter pad on his Key Biscayne property.

"They may wonder why he did not say "No" to the cost of the taxpayers footing the bill for a $60,000 windscreen around his swimming pool at the San Clemente retreat. They may wonder why he did not say "No" to the expenditure of an admitted $250,000 for extra facilities and another $100,000 annually just to maintain them at San Clemente.

"They may wonder why he did not say "No" to the $l'h million spent on plush White House offices for the largest Presidential staff in history, and "No" to thousands of dollars for silly gilded uniforms for White House guards. They may wonder why he did not say "No" to the additional $4 million for that staff, many of whom devote time almost solely to partisan political activities in behalf of Republican candidates.

"When they look at the life style of this so-called economy-minded administration, the people will not be surprised at a Cabinet member who redecorated his office at a cost of $40,000 to the taxpayers—including an $1,800 desk and carpeting priced at more than $56 per square yard.

"The people cannot be fooled forever. They know who the "big spenders" really are."

Congressman Arnold Olson mentioned the pay increase for the White House staff, up from $3.9 million to $8.5 million, and the $350,000 of government money spent on the Western White House, plus the $100,000 a year in operating costs. Olson commented:

"At a time of combined inflation and recession, when the President talks about combating high costs in Government; one wonders about the frugality of maintaining three White Houses—in Washington, San Clemente, and Key Biscayne, not to mention Camp David. What of the tremendous cost of communications to link them all?

"Certainly no one begrudges a busy President a rest retreat and our President deserves the finest facilities. But . . . if he wants to project the frugal image for political reasons—for that is the reason —then let him look to the same frugality in his own office."

"Inflation fighter" Nixon also asked for $1.1 million to operate the residence portion of the White House—an increase of $182,000 over the requirements of spendthrift LBJ. He spent $574,000 to turn the swimming pool at the White House into a press room. 19 And he has turned out to be the most lavish party thrower since Perle Mesta. According to U.S. News & World Report:

"The Nixons have been entertaining guests at the rate of 45,000 per year. According to White House aides, that is about 10 times as many guests as the Dwight Eisenhowers entertained in a year, and "many times more" than the John Kennedys entertained. It eclipses even the 26,000-guests-per-year pace set by the gregarious Lyndon Johnsons."

The President was forced to ask that an extra $119,000 be added to the White House entertainment budget out of his stringent, bare-bones, austere, economy budget.

At first Nixon claimed that his budget would produce a $5.8 billion surplus that would "speak louder than any words" of his determination to fight inflation, and said: ". . . we believe we have made a necessary and significant beginning toward bringing the Federal budget under a closer Presidential control [and] brought to an end the era of the chronic budget deficit."

As expenditures rose and revenues shrank (due to the recession that diminished the government's tax take), the $5.8 billion surplus soon became a token surplus of $1.4 billion, which was nevertheless highly praiseworthy, according to the administration. By the end of the fiscal year the surplus had turned into a $2.9 billion deficit. According to UPI on July 29, 1970: "George P. Shultz, the director of the Office of Management and Budget, said this was a good sign because it showed that the economy was stabilized and poised for an upward thrust."

"Actions speak louder than words," Nixon had said in projecting his surplus. With the pink elephants, surpluses are fine but deficits are even better.

Mr. Nixon's 1971 budget, the first one over which he had total control, was an expansion of the 1970 budget. Mr. Nixon proposed a $200.8 billion budget with a projected $1.3 billion surplus. The budget was hailed by Liberals because, as the President remarked, for the first time in twenty years:

". . . the federal government is spending more on human resource programs than on national defense. This year we are spending $1.7 billion less on defense than we were a year ago; in the coming year we plan to spend $5.2 billion less. This is more than a redirection of resources; this is an historic reordering of our national priorities."

However, former Nixon adviser Dr. Roger Freeman was aghast:

"Since that time (that is, between 1953 and fiscal year 1971 as proposed by the President), defense expenditures increased 49 percent—approximately equal to the simultaneous rate of price rise. Spending for health, education, welfare and labor increased 944 percent . . .

"More than half of the $129-billion increase in federal expenditures between 1953 and 1971 was applied to social purposes, less than one-fifth to defense. Defense meanwhile shrank from 64 percent of the federal budget to 36 percent, from 13.6 percent of gross national product to about 7.2 percent.

"In other words, the share of federal revenues and of the gross national product allocated to national defense has been cut almost in half since 1953. Most of the huge savings were applied to social purposes, with education one of the main gainers."

While Mr. Nixon is "reordering our national priorities," the Communists grow increasingly hostile and expand their strategic armaments. "More for life than war," gloated the Washington Post's Murray Seeger. To the Liberals and Mr. Nixon, our national defense, the legitimate field of the federal government, is not a "human need."

While restricting military spending and expanding most Great Society programs, the President introduced, according to the February 1970 Battle Line, "no less than seven major areas of new spending which will cost $3 billion more the first year and perhaps $18 billion annually as quickly as four years from now." The stressing of welfare spending over defense was a far cry from campaign days. The New York Times of May 15, 1966, stated:

"Mr. Nixon called for heavy cuts in non-military spending at home and a substantial cut in foreign aid except for that directly related to the military or such things as the famine in India."

The highly respected Washington correspondent emeritus of the Chicago Tribune, Walter Trohan, wrote of the Nixon program on October 29, 1970:

". . . many Republicans have betrayed "conservatism" and have been as socialistic as many Democrats, if not more so. Betrayal of conservatism has been something of a fashion for 38 years."

Some weeks ago. President Nixon assailed Congress for its failure to pass his legislative program. The curious part of his criticism was that the program was hardly "conservative," but one which any recent Democratic President might have offered.

After introducing a $200.8 billion budget, the President, as Republican Battle Line put it, threw "caution to the wind." Added expense came in the form of postal pay increases, veterans' benefits, construction loans, and government employee pay increases, and in a host of other areas. It now appears that spending for the year will be around $210 billion instead of $200.8 billion.

Yet through all this Nixon has managed to keep a public image as Mr. Scrooge, the miserly, penny-pinching budget slasher. During the 1970 midterm election campaign, economy in government was the number two theme of the Republicans behind "law and order." Some of the President's rhetoric warmed the hearts of Conservatives, as when he proclaimed: "No Federal program is above scrutiny." Later he stated, "Personal freedom will be increased when there is more economy in government and less government in the economy." But Human Events noted on January 31, 1970, following one of Mr. Nixon's economy speeches:

"But this conservative rhetoric was marred by the harsh fact that the President then proceeded to push for, or propose, expensive programs that would further propel the federal government into the very debt he had just deplored.

"Even if we could finally be convinced that gargantuan government programs were necessary to eliminate certain evils that plague the country, we would expect a Republican President to simultaneously call for the elimination of dozens of other programs that have outlived their usefulness . . . We are still waiting for the day when the President wages as vigorous a fight to eradicate billions of dollars in entrenched programs as he does to put new programs on the books."

The Nixon technique is to substantially increase a budget and then send it to Congress, where the Democrats up the bid even further. Next the President denounces the Democrats as "big spenders" threatening "the future of the American economy." Occasionally the President even vetoes an appropriation, as described in the Indianapolis Star of May 26, 1970:

"The failure of Mr. Nixon's "strict controls" is shown by the $19.7 billion bill appropriating funds for the Labor and Health, Education and Welfare departments for fiscal 1970 which he vetoed as inflationary last January. In his veto message, the President said bravely: 'These increases (in the bill) are excessive in a period of serious inflationary pressures. We must draw the line and stick to it if we are to stabilize the economy.'

"What happened? Congress nudged the bill down to $19.4 billion, whereupon the President promptly signed it. Where were the strict controls? Where was the drawing of the line and the sticking to it? Could it be said that any real effort was made to cut expenses significantly? Obviously not.

But this subterfuge allows Mr. Nixon to constantly increase spending and still project the image of a budget-cutting inflation fighter. No matter how much Mr. Nixon increases the budget, he knows that the Liberal Democrats, compulsive spenders of taxpayers' money that they are, will always hike the ante, so the ploy always works.

In February Mr. Nixon said: "I have pledged to the American people a balanced budget." But by October black had become white. The Wall Street Journal reported on October 13:

"The new Nixon has bought the "new economics"—or at least the part that condones budgetary red ink at times like now.

"In a fundamental break from his old stance on fiscal responsibility, the President has squarely committed himself to a theory that holds a multi-billion-dollar budget deficit is perfectly proper to bolster today's, wobbly economy."

On November 17, 1970, House Ways and Means Committee chairman Wilbur Mills announced that unless spending was suddenly curtailed drastically, Mr. Nixon's 1971 budget, which started out projecting a $1.3 billion surplus, was actually going to run an astounding $24 billion in the red—almost as much as LBJ's fantastic $25 billion deficit for 1968, which triggered our current wage-price spiral. Mills also declared that the deficits of the 1960's are the root cause of the inflationary problems of the 1970's.

Few Americans are aware that the deficits are understated. UPI, reporting on a statement by Rep. George Mahon, chairman of the House Appropriations Committee, said:

"The fact is that budgets for the current year and the previous year, also pictured as 'in the black,' ran in the red. The total added deficit for the three-year period, runs about $19.9 billion.

"Mahon said the apparent small surplus in Nixon's budget for fiscal 1971 [now a huge deficit] and that for the two previous years results from a new accounting system under which income and expenditures by government trust funds, such as Social Security, are lumped together with other government revenue.

"In recent years, the trust funds have run substantial surpluses that were borrowed by other government funds and included in the national debt."

During 1968, LBJ's last year in office, the debt was $365 billion, up from $293 billion in 1967, Nixon had to ask Congress to raise this, first to $377 billion, and later, in May 1970, to an astonishing $395 billion. That is an $18 billion raise during a period of allegedly balanced budgets! By the time you read this the rise will be significantly higher.

Over $17 billion per year is required just to service the debt; this amounts to more than one million dollars an hour. The annual interest on the debt is now the third largest item in the budget. No wonder Nixon's international banking friends like deficit spending: much of the interest is payable to them.

Within a week after Congress voted to double Mr. Nixon's salary, he had to ask for the first debt ceiling hike. But he included a gimmick to make it look as if he were actually lowering the debt. This was described in the Wall Street Journal of February 25, 1969:

"In a special message signed before his departure for Europe, Mr. Nixon asked that the ceiling be reduced to $300 billion from $365 billion but that Congress simultaneously exclude from the ceiling's coverage more than $80 billion of Federal securities held by Federal trust funds for Social Security and other purposes.

"Thus, only securities that the Federal Government sells to the public would be covered, a change that Mr. Nixon said would make the ceiling "conform fully" to the unified budget format that's currently in its second year. The unified system shows a deficit only when the overall U.S. establishment (including trust funds) is paying out more to the public than it's collecting in taxes."

Congressman H.R. Gross denounced this as "more financial gimmickry of the Lyndon Johnson variety," and Congress refused to allow the President to get away with it. Consequently, following the 1970 midterm elections, Mr. Nixon had to face a national debt of $395 billion with an impending deficit of $24 billion.

And it looks as if this will be small potatoes compared to what is in store for coming years. A 5.6 percent unemployment rate hurt the Republicans badly in the 1970 elections. In an article titled "Nixon Signals for Left Turn," Peter Lisagor announced in the Chicago Daily News of November 11, 1970:

"Administration officials have indicated that the White House likely will follow its drive for a liberal welfare-reform measure with new "strategies" in the field of health and education of a progressive nature.

"They also point to a tentative administration acceptance of a full-employment policy, which in the present state of the economy means deficit financing, a hallmark of the liberal approach in a situation of rising joblessness.

"With these goals in mind, the political railbirds conclude that the President's recent meetings with conservative columnists at the White House and leaders of New York's Conservative Party at his Florida retreat reflected his desire to disarm or immobilize potential critics on the right as he tilts toward the left."

Nixon's strategy of moving Left is borne out by his budget for fiscal 1972. According to Time of November 16, 1970:

"Aides say that he will send to Congress a fiscal 1972 budget with a planned deficit—amount uncertain—to follow the unplanned deficit of about $15 billion that the Government is likely to run this fiscal year . . .

"Administration officials are bandying about ideas for making the deficit look smaller than they expect it really to be . . . the President has begun to distract attention from the forthcoming deficit by stressing an idea known as the "full-employment budget." This is a theoretical measure that, instead of calculating actual Government income, figures how much the U.S. would have taken in if there were full employment. Thus, a deficit under ordinary accounting might well turn out to be a surplus in the full-employment budget.

"Example: In this fiscal year, the Government stands to spend about $210 billion and collect roughly $195 billion, thus running a deficit of $15 billion or so. But under full-employment accounting, the U.S. would show a surplus—because it would have taken in well over $210 billion if the optimum number of people had jobs."

The October 13, 1970 issue of the Wall Street Journal said of the "full-employment" budget:

". . . the concept is comforting to the Nixon regime. 'After blasting the Democrats, it is pretty hard to turn around and convince people that our deficits are good ones,' confesses a Republican strategist. But the full-employment approach, he contends, helps show that 'in fact, there's a world of difference.'"

This is as if you felt that you could have earned $20,000 this year, but you only earned $15,000, so you go out and borrow $5,000 in order to keep up a $20,000 style of living. Time of November 16, 1970, defended this LSD-trip type of economics:

"While this fiddling with figures may seem like another bit of political gimmickry, it is economically sound. The full-employment budget is a fairly reliable gauge for determining whether the amount of Government spending is restraining or stimulating the economy. To stimulate the current slack economy, a fairly large full-employment deficit is called for."

This is the very type of hocus-pocus Nixon and the Republicans used to scream about—and with good cause. The Wall Street Journal reported on October 13, 1970:

"Although President Nixon doesn't use the "full-employment budget" term, this is what he means, aides explain, when he says that his "basic guideline" for the budget is that, except in emergencies, "expenditures must never be allowed to outrun the revenues that the tax system would produce at reasonably full employment." In recent days this has clearly become the party line, popping up in every speech by high economic officials, including David Kennedy and Paul McCracken."

This is Tricky-Dickmanship at its best—or worst! According to Time of November 16:

"The key figure in Nixon's current discussions of full-employment budgeting is close to $230 billion. This is what present tax rates probably would bring in during fiscal 1972 at full employment. Nixon's dilemma is whether to hold federal spending to about that level or let outlays go still higher. So far, his aides have been passing word to department heads that spending is to be held to $225 billion. That strategy would allow Nixon to claim, correctly, that a planned deficit in the official budget would not be inflationary. But it would hold out little hope of lifting the economy toward full employment by mid-1972.

"Nixon thus will be sorely tempted to shift policy and give an extra boost to production, profits and jobs by allowing Government spending to rise still higher. Some Administration officials think that such a course would risk starting again the price spiral that the U.S. has only begun to curb, but they are frankly afraid that the boss will do it."

The President has concluded that elections are lost on unemployment and recession, not inflation. The June 22, 1970 U.S. News & World Report quoted an unnamed aide to the President as saying:

"Mr. Nixon told me that no major party ever lost an election on inflation, but they have on recession. If he has anything to say, everything will be done to see there is no recession."

Nixon hopes to postpone much of the inflation until after the 1972 elections. There is a time-lapse factor between the time the government injects the deficit-spending dollars into the economy and the time it takes for the new money to percolate through the economy, bidding up wages and prices. In the late '60's the Democrats benefited from the spending and left most of the problems to the Republicans. The Democrats enjoyed the drunken binge and the Republicans got the hangover. Now, reported Time in mid-November 1970:

"Nixon and his advisers, says one Administration economist, 'discovered that inflation started slowing down after the economy slowed down. Now they may do the reverse: speed up the economy and let the inflation come afterward—after the 1972 elections.'

"So we have come full circle from the beginning of the Johnson inflation, through a half-hearted attempt at deflation with the consequences described by Galbraith, and back to Johnsonian "stimulation." We are going to try the hair of the dog that bit us as a cure. If boom-and-bust policies are good enough for the Fabian-socialist Democrats, they are good enough for the Fabian-socialist Republicans. As Galbraith says, Nixon has a Game Plan and the "name of the game is socialism." LBJ may turn out to have been a piker. LBJ's 1967 budget was $158 billion—and it was roundly denounced by the Republicans; Nixon's 1972 budget may run $230 billion—an increase of $72 billion in five years. And LBJ's deficits, once considered enormous, may be dwarfed by Nixon's.

"Before the 1968 election Mr. Nixon called inflation 'the cruelest tax of all.' He added: '. . .it quietly picks your pocket, steals your savings, robs your paycheck. To check inflation the government must cut down on unnecessary federal spending . . .'"

In 1969 alone, inflation robbed Americans of $60 billion of their savings in banks and life insurance, as the cost of living went up an official 6.1 percent during Mr. Nixon's first year in office. In March 1970, the President told a news conference that his administration's economic policies had "taken the fire out of inflation" and would steer the nation clear of it. 28 Actually, the administration has killed prosperity, but not inflation. Production is down, unemployment is up—but prices are again rising: officially, the rate was 6 percent during 1970. (The official rate is loaded; the true rate is estimated at 10 percent by many economists.) This means that Americans have paid an additional hidden tax of $120 billion in the past two years.

Now, in order to cure the non-existent recession, the administration is prepared to hyperinflate. And the Federal Reserve Board is obviously willing to go along with the Game Plan. Board Chairman Arthur Burns, "the Kerensky of this revolution," has promised that "there will be enough money and credit to meet future needs, and that the orderly expansion of the economy will not be endangered by a lack of liquidity." He has also said he is willing to increase the money supply at a "temporarily excessive speed." In layman's language this means, "The printing presses are oiled and ready to roll." (At swank Washington soirdes Nixon men have been seen dancing the Samba to the strains of "Brazil.") Space-Time-Forecasting said of this venture:

"It's an illusion that government can make or break prosperity at will by manipulating money supply. It's tragic that men surrounding recent administrations hold this belief, in spite of historical evidence that it's never been successful—very much the contrary . . . It is obvious from statements made in the past that Nixon knows better."

Nixon inflation will produce the same chaos as Johnson inflation. Inflation is harmful to an economy under any circumstances. If Mr. Nixon had really wanted to cure the Johnson inflation and return to stability, he would have taken a course exactly opposite to the one he has taken. The best way to avoid the effects of inflation is to increase productivity and produce your way out of it. This means drastically cut government spending, balanced budgets, and then tax cuts to give businessmen an incentive to produce, and consumers money with which to buy their products and services. Instead, Mr. Nixon has instituted the economics of scarcity (as noted by Galbraith), expanding the welfare state with a consequent boost in government spending and increased taxes. This is the Game Plan, and as Galbraith observes, "the name of the game is socialism."

In 1965, Nixon declared:

"This administration [LBJ's] has adopted a completely contradictory policy in dealing with the threat of inflation. It has tried to replace the market law of supply and demand with Johnson's law of comply and expand—business complies and government expands.

"A policy that requires business to slam on the price brakes while government steps on its spending accelerator will in the end only produce a collision—and the family budget will be the casualty."

In order to postpone the worst of the increases in the cost of living until after the '72 election, the administration will have to resort to "jawboning," "guidelines," and plain old-fashioned arm twisting. Ultimately, wage and price controls will be instituted, as the Socialist Game Plan nears completion, but if possible this will be delayed until after the '72 election. If the cost of living gets completely out of hand, controls may have to be instituted even before the elections. The President has the power to do this, as is made clear in the August 12, 1970 newsletter of Congressman John G. Schmitz:

"On the last day of July, Congress held an unusual Friday session to spend several hours in a most peculiar debate on a bill establishing new cost accounting standards for defense contracting, onto which had been tacked a "rider" empowering the President, by executive order, "to stabilize prices, rents, wages, interest rates, and salaries at levels not less than those prevailing on May 25, 1970"—the date the bill was introduced. This would authorize full price and wage controls.

"After a day of bewildering maneuvers, the bill was finally passed by the astonishingly one-sided vote of 257 to 19, with six other Congressmen also "paired" against it. Thus only 25 members of the House registered their disapproval of price and wage controls."

"The redoubtable Congressman H.R. Gross stated bluntly:

". . . no President should be delegated the awful power to take over the economy and finances of this Nation without having declared an emergency and the reasons therefor. And no Congress should delegate to the President such untrammeled power without requiring such a declaration."

Instead of vetoing it, Mr. Nixon signed the bill—reluctantly, of course. Again, Galbraith's "yielding to pressure." Congressman Schmitz remarked:

"Price and wage controls will not work in a free country. But to a considerable extent they will work in a slave state like Communist Russia. If this is the only way we can think of to fight inflation, that could be its result . . . "

Wage controls, price controls, money controls are really people controls—and that is what a socialist dictatorship is all about.

In December 1969, Congress, in a hurry to adjourn for Christmas, almost clandestinely passed the Credit Control Bill under circumstances closely paralleling the establishing of the Federal Reserve System some fifty years ago. Not one one-hundredth of one percent of the American people know anything about the existence or the significance of this blueprint for complete economic tyranny. Yet it is on the books, ready to be used whenever the administration feels the time is ripe. Congressman H.R. Gross wrote:

"During the past week. President Nixon has signed the legislation into law. He did so, "reluctantly," he said, asserting that such controls, if used, could "take the nation a long step toward a directly controlled economy and . . . we can weaken the will for needed fiscal and financial discipline."

"Here we have the spectacle of President Nixon, recognizing that this is power no government should have except in the event of a dire emergency—a power that could well mean outright government control of the nation's economy—yet he gave it his blessing by his signature making it the law of the land.

"This member of Congress has warned for years that the nation was rushing headlong into financial trouble; that the price of spending insanity would be regimentation through unholy, dictatorial controls from Washington . . . and I am deeply disappointed that President Nixon, recognizing the danger, did not have the courage to veto it.

"The legislation provided that without the declaration of an emergency or any other kind of a declaration. President Nixon could turn over to the Federal Reserve, a privately operated financial institution, not only the absolute authority to fix interest rates, but the untrammeled power to fix by regulation all the 'terms and conditions of any extension of credit.'

"It is almost impossible to believe, but the legislation provides that no citizen could lend another any amount of money unless the lender was either registered or licensed to do so. A violation of this or any other provision of the legislation would subject the lender to a year in jail and a $1,000 fine. THIS IS THE STUFF OF WHICH DICTATORS ARE MADE."

Socialism requires a dictator, and with Mr. Nixon, as Dr. Galbraith reminds us, "socialism is the name of the game." It is obvious that we are on our way to another inflation-promoting tax increase in the name of fighting inflation. In speaking of projected deficits, the President has stated that if government spending,

"In spite of the strict controls I have placed on it, were to exceed the potential yield of the tax system, I would not hesitate to ask the Congress for further increases in taxes . . ."

It is widely reported that Mr. Nixon is "intrigued" (as Time put it) by a "value added tax," which is in effect a national sales tax of the kind becoming standard in the Common Market countries.31 The tax is hidden, but as UPI noted on February 13, 1970, "ultimately, the tax is passed along to the consumer in the form of higher prices." If at all possible, the President will wait until after the '72 elections to saddle the peasants with a tax hike.

Mr. Nixon's program of "re-inflation" to end what has been termed "stagflation" (economic stagnation accompanied by inflation) has international economic implications.

According to Barron's Financial Weekly of November 16, 1970, it "is apt to be the dollar's last hurrah." It is obvious that the international monetary game is rigged tighter than a new tennis racquet with Rothschild-controlled central banks, bullion dealers, and mining interests in England, Germany, France, South Africa and the U.S. (Kuhn, Loeb & Company, whose partner, Lewis Strauss, was Nixon's chief money raiser, is a Rothschild operation.) The financial ministers of these countries do not represent their sovereign nations, but instead cooperate with the Insiders in rigging the world monetary situation.

But the super-inflation planned by Nixon will augment some forty billions of dollars already in the hands of Europeans, who can exchange them for gold, and the situation could get out of control. Europeans are planning to create a European-bloc gold-backed currency, which could be instituted if and when the U.S. cuts the dollar loose from gold for foreigners as it has done for its own citizens.

This threat may be used to force acceptance of the plan to turn the International Monetary Fund (IMF) into a world central bank, controlling all money of all nations. William McChesney Martin, despite the fact that he had already retired as chairman of the Federal Reserve Board, gave a speech in Basel, Switzerland, on September 14, 1970, at a symposium sponsored by the Per Jacobson Foundation, entitled "World Central Bank: Essential Evolution," in which he advocated just that. What area of control could be more decisive than control of world money? World money control means world people control.

Meanwhile, reports persist, albeit unconfirmed, that the U.S. is preparing a new money. Myers Financial Review of November 6, 1970 stated:

"The rumors keep coming in. They are past the point where I can ignore them. Still I can't confirm them. The reports are these: The U.S. Treasury has already printed up an enormous supply of new currency differing markedly from the present denominations. The report is that the new currency will be used internally in the U.S., and that all the old currency within the U.S.A. will be called in. The old currency, as long as it continues to exist, will be used outside the U.S.A.

"I have no inside way of knowing whether this is true. But for many months I have been receiving reports that the Treasury has been stocked with huge new color presses. I am inclined to lean toward the truth of the report, since in Canada we are already getting a fancy new currency. The $20 bill looks like Disneyland. It is swiftly replacing all old $20 bills. It gives one the impression of a kind of scrip. There has been no explanation of why we have replaced our old $20 bills with these curiosities.

"It seems to me that this internal U.S. currency would be no good outside the country. Not redeemable, it could not be converted into Euro-dollars. It would in itself be a most effective foreign exchange control. In order to get your money out of your banks to make foreign purchases, you would probably have to get special licence from the government.

"We may be heading not just for devaluation but for a collapse of all money, and a new U.S. paper dollar in exchange for several old ones. The November 1970 report of international currency expert Franz Pick maintains: "The only open door will be to change the official gold value of the MINI-dollar or to exchange 3 or 4 present dollar bills for 1 new one. "

What does the Nixon Game Plan mean? Many economists are predicting a superboom (based on inflation, not increased productivity), with a Dow Jones rising to possibly 1500, beginning in the latter part of 1971 and extending through the 1972 election. Then, in 1973 or '74, these economists are predicting that the false boom will lead to economic collapse and a depression that will make 1929 seem like prosperity by comparison. If this happens the cry will be that "capitalism has totally failed."

Gigantic unemployment, particularly among Negroes, would lead to nationwide riots, giving the appearance at least of a full-scale revolution. The general population would demand a socialist dictatorship to end the economic and social chaos. And the Nixon administration would be only too happy to comply—"the familiar yielding to pressure," as Galbraith says. Nixon is merely following the Game Plan established for him by his fellow Insiders, who plucked him out of political oblivion following his loss of the governorship of California in 1962, brought him to New York, and financed and promoted his ascent to the Presidency. A Democratic administration could not get away with it, because the Congressional Republicans would expose the Game Plan and possibly prevent it. Now most of them remain silent, or silenced, all in the name of "party unity."

In 1934, FDR prohibited Americans from owning gold to protect themselves from government money manipulation. Since that time the government has destroyed about 80 percent of the purchasing power of the dollar through increases in the money supply. Economist Henry Hazlitt has written:

"No sound monetary system is possible so long as governments operate on the premises of the new economics.

"The real reforms that are needed are all in the opposite direction. Strict limits must be put on the further issue of paper money. Ultimately the world must work back to a real gold standard.

"But no nation can achieve sound monetary reform so long as its government embarks on huge spending programs, so long as it runs unending budget deficits, so long as it keeps printing more money and so long as its unions are encouraged to force up wage rates to levels that need more inflation to sustain them. In brief, sound money is impossible in the welfare state."

Major nations forbidding their citizens to own gold in modern times include: Communist Russia, National Socialist Germany, Socialist England, Communist China, and the U.S.A. All dictators fear the private ownership of gold. Since FDR's prohibition of gold ownership was not passed by Congress but was imposed by inserting an "Executive Order" in the Federal Register, Mr. Nixon could abolish this dictatorial edict with the stroke of a pen, issuing an "Executive Order" voiding FDR's. This would go a long way toward restoring liberty and fiscal sanity in America. But there is no more chance that Richard Nixon will restore this liberty than there is that Mao Tse-tung will convert to Christianity. Why? Why can't Americans own gold? Isn't that an interesting question?

Barron's Financial Weekly reports that well over a decade ago Malcolm Bryan, president of the Federal Reserve Bank of Atlanta, bluntly told an audience: "We should have the decency to say to the money saver, 'Hold still. Little Fish! All we intend is to gut you.'" In the end we shall all be gutted if the Whittier Machiavelli's Socialist Game Plan is not exposed and reversed.