Editorial
By the beginning of the 1970s the “golden age” of America was coming to the end in more than just one way. Such things as inflation, unemployment, energy shortages, and much more contributed to one of the worst economic periods America has ever suffered. The crisis of inflation had begun by 1972 as oil prices, greed, and many other factors consumed Americans. On main reason of the inflation were the monetary policies as they were what caused the large deficits to occur. Milton Friedman, an American economist, once said in one of his books that inflation seems to always be caused by monetary means; and even though this is not completely accurate it seems to be true for most cases throughout history. After having inflation soar the economy went into a recession and went on to seriously cripple countless businesses and American citizens. Despite this Americans looked on the bright side as unemployment was substantially low in 1972, this led to the reelection of Richard Nixon. However, in Nixon’s second term even worse troubles would occur as he and the Federal Reserve are unsuccessful in saving the US’s economy. In 1971 Nixon set the U.S. up for failure by instating both price and wage controls. Even though this method seemed to help in the short term it would eventually assist in the inflation boom. Then, during the same year, Nixon had devalued the dollar as he changed America’s currency to fiat currency. This made the millions of dollars that foreigners had halve in value. Continuing this sorrowful cycle Nixon ignored things such as deficits and inflation and only focused on avoiding a recession in order to win a reelection. When he changed the Fed Chairman to Arthur Burns he made sure that Mr. Burns would focus on keeping interest rates low. However, doing this would only help for the short term as in the long term it would create many more problems than it would solve. But instead of worrying about America’s future Nixon decided to fool Americans into believing that the economy wouldn’t falter under his watch and just used a temporary solution. Stagflation, the condition in which both inflation and unemployment rise, became a reality in the 70s. In response to this President Carter increased spending and used other economic tools to guide the inflation, but nonetheless it proved futile. The only real change occurred when the government was strict in terms of the money supply as they declined to keep feeding an inflation-raged economy. Though, this led to a recession because of the increased interest rates which was necessary yet still a large hardship for Americans. In order to fix the economic struggles that occurred in the late seventies and early eighties the US would need a new Federal chairman who was strict on the money supply as Americans would have to endure a recession in order to get through an economically plagued time.