58 HOW TO PAY FOR THE WAR

as that of the deferment of pay here proposed.The choice between these drastic and equally-effective alternatives must be decided on con-siderations of public psychology, social justice andadministrative convenience.

Those, however, who are opposed to a schemefor deferred pay, do not, as a rule, oppose itbecause they prefer one of the drastic alternatives,but because they believe that we can win throughby "normal" methods, that is to say by stifftaxation on existing lines and by voluntarysavings stimulated by active propaganda.

Now this policy might mean either of twothings. It might mean a repetition mutatismutandis of our policy in the last war, namelya sufficient degree of inflation to raise the yieldof taxes and voluntary savings to the requiredlevel. The mechanism of this process is the mainsubject of this chapter.

But it might also mean—and that is what itsadvocates would claim for it—something muchbetter than this, namely an equilibrium betweensupply and demand without any aid from aninflation.

The practicability of so happy an outcome isclearly a question of degree. For example, if theincrease in the expenditure of the Treasury, com-pared with the financial year 1938-39, was nomore than £1,000 million, or perhaps £1,250million, we might reasonably expect "normal"methods to be adequate (supplemented, of course,by drawing on the available capital resources).If, on the other hand, the increase in expenditure