Consumer Debt and Inflation

There is perhaps little dissent from the proposition that Debt and ranks high among the problem areas in American economic life. The interest in this topic is current and possibly tran? sient Nevertheless, it remains true that Consumer Debt and Inflation have been studied more extensively in the past three years than almost any other economic items. The monumental rise in the volume of con? sumer debt during the year 1955, arising largely from record automo? bile sales, prompted President Eisenhower to urge initiation of a study designed to show whether consumer instalment credit had got out of hand and whether a policy decision on its regulation was in order at the time. Accordingly, the Council of Economic Advisors petitioned the Federal Reserve to undertake such a study. Nearly a year was required to make the desired investigations and the report was released on March 20, 1957; The report examined consumer instalment credit from every con? ceivable angle. Not least in importance was the search for an answer to the question of whether expansion and contraction in consumer bor? rowing intensify upswings and downswings in business activity gener? ally and thus interfere with the process of orderly economic growth. This introduced the investigation of possible connections between con? sumer debt and inflation

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