Inflation Everywhere

Inflation is becoming a worldwide epidemic, producing political fevers as well as economic bruises. Practically no country is immune, regardless of its wealth, size, politics or state of devel opment. Almost everywhere inflation is worse than in the U.S.

In Belgium, where prices rose 4% in the past twelve months, the government fell three weeks ago because it proposed emergency taxes to keep prices in check. Austria next week will hold a national election, with inflation as the central issue: prices advanced 5% last year, and Socialists are mad because the conservative People's Party favors a temporary tax increase. In a rare show of opposition in Portugal, the dictatorial government of Antonio Salazar was openly criticized in newspapers last week because living costs are climbing; potato prices are up from 60 a sack to 120 in a year, and other food tags are rising.

Inflation in most countries has the same causes as in the U.S.: extensive demand, full employment and near-capacity production. Britain's unemployment level is at a near-record low of 1.2%; since last March, wages have risen 9% and prices 5% . In West Germany, where wages increased 8.9% last year and the cost of living grew by 4.2% , Bundesbank President Karl Blessing warned last week that the economy has become dangerously unbalanced and that "the present tempo of cost and price increases cannot continue if we are to stay competitive in world markets." Israel is riddled with inflation because of heavy consumer buying and government spending, including wage boosts for government employees.

In some instances, sharp price rises stem from special local situations. In India, inflation is the ugly result of the food shortage; most people spend 75% of their meager incomes trying to get enough to eat. Viet Nam's prices have shot up 58% in a year because of the war and the influx of free-spending G.I.s. Peru's government is spending prodigiously on a national development program, with the result that prices went up 18% last year, are expected to rise 25% this year. Brazil's government, battling one of the world's worst inflationary problems, hopes gamely to reduce the rise in living costs from last year's 45% to 25% in 1966.

If there is a single thread that runs through most of these situations, it is simply that human demands are rising exuberantly and straining the available supply of materials and machines to make the goods.

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