Cecil Jensen
According to the Wall Street Journal, on June 18, 1958, the United States economy was heading toward an inflationary spiral: “Credit expansion born of deficit financing will fuel a new, more destructive round of inflation that will reduce the dollar’s value to new lows.” This followed the recession that lasted from August 1957 to April 1958. Economists expected business to pick up, employment to increase, and wages and prices to rise--all factors that would lower the value of the dollar. This situation would increase the marketability of domestic goods overseas, but reduce the ability of Americans to buy foreign-made products or to travel abroad. In all, the national debt would increase causing more dependence on foreign countries.
Congress was expected to raise the debt ceiling to $300 million. Bureau of the Budget director Maurice Stans said that he saw no “possibility of balancing the budget for several years.” The Journal quotes an unnamed economist saying, “I don’t blame anyone for being frightened at what’s ahead.”