| Highlights of DAWN | June 1978 |
Streets of Silver and Gold!
“AT ANY Washington, D.C. … [gathering] where economists are present,” states Time magazine (March 27, 1978), “the main topic of fretful conversation these days is inflation. … Echoing almost all the experts, as well as the public opinion polls, Federal Reserve Chairman G. William Miller told the Senate Budget Committee last week that inflation is the nation’s No. 1 economic problem. He also warned that it is growing worse.”
Under the heading “A Tide of Red Ink,” Newsweek magazine (January 30, 1978) showed a chart of the federal budgets for the years since 1941. Of the thirty-seven years involved in the presentation, only eight have shown surpluses, totaling in all some $35 billion, while twenty-nine have shown deficits totaling $600 billion, resulting in a net deficit for the thirty-seven years of some $565 billion.
Of the last twenty years there have been just two that showed a surplus (for a meager total of $5 billion), while in the last five years alone the five deficits totaled $280 billion. Only once since 1960 has the federal budget shown a surplus. As a result, the federal debt has grown to the point where annual interest payments on the debt now amount to about $42 billion. It is worth noting that as recently as 1948 the total cost of the Federal government was less than that amount. Today the annual cost of running the Federal government is over $500 billion.
How can the United States government continue to run such appalling deficits year after year? It is quite simple, but not without serious consequences. The United States Treasury Department sells its securities largely to the commercial banks of the nation. The banks then show the Treasury securities on their balance sheets as assets and credit the Treasury checking account with an equivalent amount.
Nothing tangible has resulted from this transaction, no physical goods have been produced. What happens is that now a larger number of dollars is in existence, but it is chasing the same amount of physical goods that existed prior to the transaction, resulting in higher prices for goods. Thus the chronic deficit fiscal policy of the government is an important factor in causing the inflation that drives up the cost of goods and services.
The injury that results from such a policy long pursued is substantial and widespread. In the U.S. in the last four years alone the composite price of all foods has risen 36%; the cost of new cars is up 29%; clothing 19%; medical care 47%; doctors’ fees 49%; property taxes 19%; electricity 52%; and heating gas 87%. Thus the savings of the people are penalized, for their purchasing power is sharply reduced. The value of life insurance, which was supposed to protect the families of the deceased, deteriorates.
“Thanks to the double-digit inflation of 1973-74 and the bust of 1973-75, most people are keenly aware of what economic tides can do to them,” stated U.S. News & World Report (May 1, 1978). “Millions have seen retirement plans threatened by price rises that can spoil their nest eggs. Millions more have been subjected to layoffs that seemed to come without warning.”
Following World War I the financial difficulties that Germany found herself in led to a reckless resort to the printing press. As a result of the ensuing inflation, the mark was quoted in Cologne in the fall of 1923 at four trillion to the dollar. In other words, the mark was rendered virtually worthless. The financial havoc and human suffering that followed were incalculable. Businesses were wiped out, jobs lost, and personal savings made worthless.
Mr. Carter stated during his pre-election campaign that he would achieve a balanced budget by 1981. Today he is far from sure. Meantime, the tax demands upon the people for money to run the various departments of the government increase. Military spending alone is estimated at 23.5% of the fiscal 1979 budget. Social Security, health care, and welfare costs amount to a staggering $210 billion, or 41.9% of the 1979 fiscal year budget—costs which, prior to the 1930s, were practically non-existent. And the end is not in sight, for long-term, built-in programs mandated by Congress and protected by politicians, rarely die, while new ones are continually created and expanded. In spite of the expenditure of these vast sums, serious unemployment persists, particularly among the young and the minority groups of the nation.
Time magazine’s recently featured article on inflation carried the subheading “And the Government starts to view itself as the villain.” Among the causes of inflation that the writer laid to governmental action are the decline of the dollar on foreign exchange markets, increases in the minimum wage and in Social Security taxes, and countless regulations (involving every phase of the economy) that tend to lower output per man-hour in private industry. The writer concludes, ominously, “The inflationary genie may be out of the bottle.”
What can be done to cure these ills? On this point there is substantial and continuing disagreement among the experts. One group of economists believes the Federal government should manipulate the budget by spending more when the economy is slowing down and unemployment increasing, and spend less when the economy is brisk. A second group of experts holds that the Federal Reserve should regulate the pace of the economy by loosening or tightening the amount of credit available to borrowers as conditions demand. In this latter group are those who believe the economy would pretty much correct itself if the government largely kept its hands off.
Still another set of economists contends that the economy is so influenced by the actions of the great labor unions and by large corporations that these powerful segments of the economy must come under greater control through federal regulation of prices and wages and by national planning of the economy. Thus we find that even the experts are widely divided as to how the malady should be cured.
Time magazine suggested “Ten Ways to Cut Inflation” (April 10, 1978). Among the proposed methods were the following: reduce the size of the budget, restrain Social Security benefits, limit federal pay, hold down state wages, chop farm subsidies and controls, hold back the minimum wage, and freeze executive pay. When one considers that each of these proposed remedies would require monetary sacrifices of varying degrees from vast political constituencies, it is difficult to suppose that many of them would get any meaningful support, from either legislators or the public.
It is instructive to observe the Washington mode of thinking, as reported by U.S. News & World Report (April 3, 1978), when it stated that Carter’s top economic advisers, urging quick action on an anti-inflation package, were blocked at least temporarily by presidential adviser Hamilton Jordan, “who was worried about an adverse political impact.”
The problem is somewhat akin to that of the physician seeking to prescribe medicine for a patient suffering from different ills. The medicine that could alleviate one ill might aggravate another indisposition. Thus, it is believed by some that one way to attack inflation would be to cut down on overall spending; but this would cause a slowdown in economic activity and would further increase unemployment. On the other hand, while greater spending would relieve the unemployment situation, it would worsen the inflationary problem. There is, of course, no simple solution. The problem is complex, involving governmental fiscal and monetary policy, worker attitudes and wages, product pricing, investment in capital assets, weather, foreign competition in U.S. markets, high-priced oil imports, etc.
The malady of inflation is not a new phenomenon. Indeed, since March, 1933, when the United States went off the gold standard, the present domestic purchasing power of the dollar as measured by the Consumer Price Index has shrunk to about 20% of its 1933 value. Nor is it confined to the United States—it is worldwide and is far more severe in many other nations than in this nation.
The unspoken fear that worries international bankers and statesmen is prompted by awareness of the fact that the economic and financial world is shrinking, with the fortunes of all nations of the world increasingly intertwined with those of other nations. Thus, what happens in the United States for good or ill is of vital importance to all other nations. A financial disaster here could have severe repercussions throughout the world. Says U.S. News & World Report (January 9, 1978), “The swelling volume of Euro-dollars, the vast floating supply of American currency held abroad and largely beyond the reach of bank regulatory officials, concerns some Continental financial experts.” One French banker suggests that “the U.S. in time must try to control this mass of money.”
Taking cognizance of the seriousness of the situation, President Carter recently (April 11) addressed the nation via television, setting forth an anti-inflation program that he hoped would produce the desired results and appealing to labor and industry for cooperation in his plans. He stated that there are “no easy answers to inflation.” He called attention to one difficult aspect of the problem when he said: “We all want something to be done about our problems—except when the solutions affect us. … We favor sacrifice, as long as others go first. … We denounce special interests, except for our own.” In short, the selfishness that so generally motivates mankind is a major stumbling block to correcting this as well as many other human difficulties. And this same attitude motivates many of the elected representatives of the people, who should initiate the unpleasant programs needed to bring inflation under control but who fear adverse personal political reaction.
As relationships between the nations of the world become more complex and interdependent, the economic and financial health of the other nations of the world becomes a matter of deep concern to all. This places a special burden of responsibility on the United States, the nation to which so much of the rest of the world looks for financial, economic, and moral leadership and strength.
It is true, of course, that civilization has survived many varied and severe catastrophes during its long history, including financial disasters. We are not here suggesting that the present financial difficulties of the United States will forthwith plunge it and the world into chaos. We believe that the final phase of the biblical time of trouble to precede the establishment of Christ’s kingdom on earth will comprise a great many different agonizing elements. And on the basis of Bible prophecy we believe one of these vexatious factors will be financial distress, wherein much gold will be valued less than a loaf of bread.
In the climax of that terrible time of trouble, or day of God’s wrath, the Bible indicates that the people will be unable to purchase either peace or food with their wealth, which will become worthless. The Prophet Ezekiel writes: The morning is come unto thee, O thou that dwellest in the land: the time is come, the day of trouble is near. … The time is come, the day draweth near: let not the buyer rejoice, nor the seller mourn: for wrath is upon all the multitude thereof. … They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord: they shall not satisfy their souls, neither fill their bowels: because it is the stumbling block of their iniquity. … Destruction cometh; and they shall seek peace, and there shall be none.”—Ezek. 7:7,12,19,25
In the day of the Lord’s anger there will be no escape; all the former refuges of the mighty will fall before the wrath of the Lord, and the proud and lofty will be brought low. Their wealth will not protect them.
“The day of the Lord of hosts shall be upon every one that is proud and lofty, and upon every one that is lifted up; and he shall be brought low: and upon all the cedars of Lebanon, that are high and lifted up, and upon all the oaks of Bashan. And upon all the high mountains, and upon all the hills that are lifted up, and upon every high tower, and upon every fenced wall. …
“And the loftiness of man shall be bowed down, and the haughtiness of men shall be made low: and the Lord alone shall be exalted in that day. And the idols he shall utterly abolish. And they shall go into the holes of the rocks, and into the caves of the earth, for fear of the Lord, and for the glory of his majesty, when he ariseth to shake terribly the earth.
“In that day a man shall cast his idols of silver, and his idols of gold, which they made each one for himself to worship, to the moles and to the bats; to go into the clefts of the rocks, and into the tops of the ragged rocks, for fear of the Lord, and for the glory of his majesty, when he ariseth to shake terribly the earth.”—Isa. 2:12-21
The Prophet Zephaniah tells much the same story concerning the distress to come on the world in the day of the Lord Jehovah. It will be a trouble that is widespread and all-encompassing. He indicates that even the most powerful among men will not escape and states the reason for the troublous times as being man’s iniquity:
“The great day of the Lord [Jehovah] is near, it is near, and hasteth greatly, even the voice of the day of the Lord: the mighty man shall cry there bitterly.
“That day is a day of wrath, a day of trouble and distress, a day of wasteness and desolation, a day of darkness and gloominess, a day of clouds and thick darkness, a day of the trumpet and alarm against the fenced cities, and against the high towers. And I will bring distress upon men, that they shall walk like blind men, because they have sinned against the Lord: and their blood shall be poured out as dust, and their flesh as the dung.
“Neither their silver nor their gold shall be able to deliver them in the day of the Lord’s wrath; but the whole land shall be devoured by the fire of his jealousy: for he shall make even a speedy riddance of all them that dwell in the land.”—Zeph. 1:14-18
The Lord God has made it clear that the purpose of the destruction to come upon the world of mankind in the day of his wrath is to rid the earth of iniquity and iniquitous institutions and to permit mankind to return to the reverence and obedience of their great and loving Creator during the thousand-year reign of Christ and his faithful footstep followers of the present Gospel Age. The groundwork for that wonderful time has already been accomplished by the sacrifice of our Lord Jesus Christ as the propitiation for the sins of the whole world, so that “whosoever believeth in him should not perish, but have everlasting life.” (John 3:16; I John 2:2) This opportunity for everlasting life will include even all the dead, who will be called forth from their graves to life here on earth.—John 5:25-29
The Prophet Zephaniah wrote: “Therefore wait ye upon me, saith the Lord, until the day [of the Lord] that I rise up to the prey: for my determination is to gather the nations, that I may assemble the kingdoms, to pour upon them mine indignation, even all my fierce anger: for all the earth shall be devoured with the fire of my jealousy. For then [after that] will I turn to the people a pure language, that they may all call upon the name of the Lord, to serve him with one consent.”—Zeph. 3:8,9
We believe other prophecies of the Bible indicate that we are already in the day of the Lord, or time of trouble. We believe the time for the establishment in the earth of Christ’s millennial kingdom for the blessing of all the families of the earth is near.—Gen. 22:18; Rev. 20:6; 21:1-4; 22:17
In that glorious kingdom of righteousness there will be neither want nor hunger. Possibly there will be no need for money. Perhaps the whole world will have “all things in common” as did the early church. (Acts 4:32) “The wilderness and the solitary place shall be glad for them; and the desert shall rejoice, and blossom as the rose. … And the parched ground shall become a pool, and the thirsty land springs of water: in the habitation of dragons, where each lay, shall be grass with reeds and rushes.”—Isa. 35:1,7
Slums and ghettos will be no more. “They shall build houses, and inhabit them; and they shall plant vineyards, and eat the fruit of them. They shall not build, and another inhabit; they shall not plant, and another eat: for as the days of a tree are the days of my people, and mine elect shall long enjoy the work of their hands.”—Isa. 65:21,22
Economic tyranny will be abolished. “They shall sit every man under his vine and under his fig tree; and none shall make them afraid: for the mouth of the Lord of hosts hath spoken it.”—Micah 4:4
All the inhabitants of the earth will love and worship and praise their Heavenly Father for his boundless mercy and tender care, and will offer everlasting thanks and praise to his Son, who gave his life that all the world might have life.
“In that day [of man’s restitution to the likeness of the perfect man Adam before his fall] thou shalt say, O Lord, I will praise thee: though thou wast angry with me, thine anger is turned away, and thou comfortedst me. Behold, God is my salvation; I will trust, and not be afraid: for the Lord Jehovah is my strength and my song; he also is become my salvation. …
“And in that day shall ye say, Praise the Lord, call upon his name, declare his doings among the people, make mention that his name is exalted.
“Sing unto the Lord; for he hath done excellent things: this is known in all the earth.
“Cry out and shout, thou inhabitant of Zion: for great is the Holy One of Israel in the midst of thee.”—Isa. 12:1-6