From a comment at Warren Mosler's blog, by MRW. Worth reposting in it's entirety (fixed a few typos for easier reading, and added the Beardsley Ruml link).
This is an awesome example of what our grandparents knew, our parents forgot, and we have to learn again. What will it take to ensure our grandkids don't have to relearn it the hard way? Carve it into the marble at every Fed building?
MRW Reply: August 4th, 2012 at 3:45 pm
I laughed when Rickards brought up the spectre of German hyperinflation. Keep this post to show your worried friends. Better yet download the whole book.
The quote below was written in 1939 by Richard L Owen, Former Chairman, Committee on Banking and Currency, United States Senate. It was presented to Congress in late January 1939, then sent out for printing at the Government Printing Office.
‘Natch, since this showed up a few months before WWII, who's read it?
Get a load of the title:
National Economy and the Banking System of the United States — An Exposition of the Principles of Modern Monetary Science in Their Relation to the National Economy and the Banking System of the United States
76th Congress, 1st Session, Senate Document 23
Chapter XVI, The Inflation Bogey, pg.65_
The old system is vigorously defended. Its advocates and defenders fill the American press with articles dealing with the question of our economic life in which they attribute the evils arising under the existing system to many other causes than the real fundamental cause. Modern monetary science exposes the real cause beyond the possibility of doubt or successful contradiction. But the advocates of the old order, minimize or denounce monetary causes as being responsible for our national distress. The purport of these various articles seems to be to warn the Members of the Senate and House of Representatives and the people against “tinkering with the currency,” against “fiat” money, against “printing press money,” and against the dangers of “inflation.” The experience of Germany following the World War is pointed out as a terrifying example, in which inflation resulted in the destruction of the value of bank deposits, bonds, insurance policies, mortgages, and other evidences of debt, by reducing the German mark to zero value through the inflation of the German mark billions of times.
The term “inflation” has thus been built up as a bogey warning the people against any necessary expansion by using the term as equivalent to a defensible and necessary expansion of the money supply.
These advocates of the old system (which has continuously reproduced one depression after another) seem to rely upon the lack of an informed public opinion. They frighten the people by the bogey of “inflation” as if the advocates of modern monetary science proposed “inflation.” Modern monetary science vigorously opposes “inflation.” It vigorously opposes the “inflation” which has been employed by the sagacious few to profit and to acquire the wealth of the ignorant many.
Modern monetary science proposes an adequate plan by which to prevent inflation for all time.MRW: "Add this to Ruml’s 1946 “Taxes as Revenues are Obsolete” and I think you can blame WWII and people’s concerns with it as the reason why no one paid attention to what theses gents were trying to explain to Congress."