top this one if you can, dep’t. Some of those fighter planes North Vietnam captured back in April have turned up in Colombia (the Russians, having liberated them from the North Viets, have traded them to Colombia for coffee), but the kicker is this. Colombia has dug up an old treaty that says the U.S. is obliged to supply spare parts for all U.S.-made weapons, and has handed Uncle Sam a shopping list.
Walter Heller, one of the chief architects of the inflation of the late Sixties and an apologist for the inflation of the Seventies, is at it again. His line—always—is that there is no danger of inflation from financing still larger deficits by creating still more new money, because the new money will only put idle men and machines back to work in industries and areas where there is ample slack. None of the money will bid up prices in industries operating at or near capacity, nor will it necessarily do so later in the recovery. There is no time lag at all in the Heller “fine tuning” model, so we can deal with inflation after it arrives. For now, says Heller in the New York Times, the Federal Reserve should “pledge to hold interest rates at or below present levels for the next six to nine months.” The notion that the Fed can keep interest rates down by making money increasingly abundant is hilariously obsolete. A flood of new money makes lenders and borrowers expect more inflation, so interest rates rise to compensate for the shrinking dollar. A magnificent antidote to Heller’s consistently wrong predictions is the short booklet by Senators Buckley and McClure, “An Alternative Economic Plan: A Proposal for Growth without Inflation.” The book is available for a dollar from the ACU Education and Research Institute, 422 First St., S.E., Washington, D.C. 20003. It is particularly recommended to columnist Tom Wicker, who evidently would rather write about economics than learn about it.
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