Econ- Inflation Story Board
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- Inflation reached 5.5% in 1970, and continued to rise up to 14.4%. Paul Volcker becomes the chair of the Federal Reserve after explaining to President Jimmy Carter that he plans on raising interest rates in order to solve their inflation issues. President Carter calls him the next day to let him know that he got the job.
- President Carter
- You're hired !!!!
- I plan on ending inflation by increasing interest rates to nearly 20% overtime
- I'm aware of the damage it'll cause the economy, but inflation is rising!
- Paul Volcker
- In 1979, interest rates were 10% and Volcker pushed them up to 17.6% within a year. By 1981, his policies had pushed rates up to about 19 percent. It was now way more expensive to borrow money or to own a house or a car, so people stopped doing it, which caused a recession. Unemployment rose above 10%, the economy was dying.
- UNEMPLOYMENT IS TOO HIGH
- Eventually, the 14.6% inflation in March of 1980 reduces to 1% by 1986. Citizens see an extreme decline in price increases. The Volcker era set the economy on the right track for several decades of very strong, stable growth. The short-term damage caused to the economy improved the economy in the long-term, and thanks to Volcker, the economy is truly thriving.
- YAY I 3 PAUL VOLCKER HE SAVED THE ECONOMY!
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