Age of Inflation

Although this book was written in the late 70s, most of it rings very true today. Sennholz, an Austrian school economist, discusses inflation, deficit spending and gold. One particularly interesting section is on the progression of the German economy from 1914-1948. The Germans established several programs during the period which in terms of trying to combat the inevitable inflation of deficit spending and pump up their economy may be relevant to our future. One of the first things the Germans did under Hitler which raised the hair on my back, was to pump up auto sales. They didn't use Cash for Clunkers but they made anyone with an older car pre-pay for ten years of registrations. Of course, rather than pay, many citizens decided to buy a new car instead. Another trick the Germans used to close budget deficits that may pop up in our future was to announce that those who pre-paid ten years of real estate taxes would be exempt from future taxes. (Of course when the German economy self-destructed by the end of WWII, I have no doubt that 'permanent' exemption was forgotten). Finally, for fans of the gold standard, Sennholz briefly enumerates a step by step program to bring it back. In closing, some of the book sounds a bit dated since it was written thirty years ago. However, what is surprising is how much of it is still relevant today, perhaps even more so. The deficits that Sennholz condemned are far bigger today. I highly recommend this book both for the Austrian perspective but also for the exposition on the German economy and how the government very cleverly avoided inflation even with big deficits but still destroyed the economy in the end.