Today, national economic policy making is largely concerned with the problems of unemployment and inflation. More precisely, it is their simultaneous combination in nearly all Western economies which preoccupies policy makers. As these problems grow worse, the stakes rise higher. We know that either severe unemployment or sustained inflation, let alone both together, can be expected to have the most serious consequences for liberal democracy.Almost four decades ago, during America s worst economic period since the Great Depression, I wrote the words above in the first edition of this book (1976). Now, in 2012, one is tempted to quote the inimitable Yogi Berra: this is deja vu all over again.
Thus, the questions arise: Will the perennial global monetary crisis and the century-old age of inflation be underway forty years from now? Will the global economy have succumbed to national rivalries, mercantilism, currency wars, financial disorder and entropy? Or, will monetary order have been restored by the leading nations of the world in their own self-interest? The passage of almost forty years has not changed my mind; there is a necessary and sufficient solution to the problem of financial disorder. My conviction has only grown deeper that American and world prosperity depend on monetary reform, Federal Reserve reform, and restoration of international monetary order. American public and private finances have been sustained during the past generation by running down the immense capital laid up for us by centuries of frugal, enterprising forbearers. This liquidation of national capital for current, unrestrained, consumption may have a long, but finite life. The endgame is financial reform or national bankruptcy. National bankruptcy or its equivalent (systemic currency depreciation) is not inevitable. Monetary reform, led by America, is still plausible, especially because monetary reform has again become a national political issue.
Lewis E. Lehrman, 2012