Sound Finance in War-time
When the layman contemplates our apparently illimitable expenditure on armaments and the destruction of property by enemy action he is naturally inclined to think that the end of the war will leave us deeply impoverished if not destitute. In his broadcast last Monday Mr. Maynard Keynes assured us that there is no reason for• such gloomy views. He points out that the total loss of national resources during the war has not yet been greater than the amount by which we increased it in the previous two or three years. Great Britain today is richer than in 1937. Even if we consider the recent destruc- tion of property by heavy bombardments, the loss through a million pounds' worth of damage every night for a year would be no more than the loss of 4 per cent. of our buildings and their contents, replaceable in a couple of years with something that should be much better. Moreover Mr. Keynes, with characteristic repression of any human desire to prove his own prophecies right, admits that in spite of the Government's refusal to accept his scheme of deferred pay there has been no significant degree of budgetary inflation up to date. The Budget, coupled with voluntary lending to the State, has not done so badly in diverting what is necessary from private expenditure to war expenditure. The domestic price-level is not now rising, and there appears to be no domestic inflation. None the less it has to be remembered that the financial strain of full war is only beginning—we are approaching the burden that Germany has been shouldering for five years. Hence his insistence that we still need a policy to keep the balance between public and private consumption, to maintain the sound financial position we still enjoy, and to preserve the good hope that the standard of living after the war will be better and not worse.
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