World economic review and forecast 1968 [antikvár]

10 AN APPRAISAL OF THE ECONOMY By THOMAS E. MULLANEY Financial and Business Editor This should be another momentous year for the American economy. But it could also be a trying one—for consumers, for taxpayers, for investors and for business. If 1967 was the year of adjustment in a seven-year sweep of expansion, 1968 may be the year of inflationary and troubled growth for a nation caught with commitments it cannot afford. The high-soaring economy seems poised for another record this year— unless it runs around on the shoals of continued inept fiscal and money management in Washington. Assuming events unfold as most economists predict, a growth of 7 per cent—or $60-billion—is in prospect for the gross national product. By the year-end it could be just $150-billion shy of the trillion-dollar level. Despite the nettlesome drift in national policy last year, the economy successfully forded a turbulent stream. It came through a difficult test in fine shape, but bears some unpleasant scars from the experience. The desire to pursue a guns-and-butter, business-as-usual policy was simply too ambitious. Nevertheless, confidence over the outlook is running high in business and economic circles, though it is quite obvious the optimistic mood carries an undertone of caution and concern—more than at any time since the start of this spectacular decade. Spirit of Malaise This is an era of unparalleled prosperity, affluence and full employment, but a strange spirit of malaise is sweeping the land. Political, economic and social challenges of supreme complexity and uncertainty have usurped the attention of the nation and overshadowed the monumental achievements of its robust economy. War, inflation and social unrest constitute a powerful triumvirate of difficulties, but they hardly constitute the full panorama of the nation's problems. Leading the list are two main issues: prices, which increased about 3 per cent last year in their largest jump since the 3.7 per cent rise in 1956, and the deepening deficit in the balance of payments, a deficit that was heading toward the perilous total of $4-billion as 1967 ended. Equally important is the effort to preserve the integrity of the nation's currency, to promote stability in the economy, achieve more harmonious relations between business and labor and provide leadership for aiding the less-privileged peoples of the world. More than anything else, though, the American people are restive under the yoke of a costly and unpopular war in Southeast Asia and the inexorable rise in living costs at home. Frustration, anger and anxiety are everywhere—among thousands of students protesting on their campuses, Negroes demonstrating in their ghettos, hippies escaping to their psychedelic lairs, housewives depressed by rising prices, farmers reacting against tumbling prices for their produce and city dwellers manifesting concern over crime and violence in the streets. Restraint Is Needed If Washington addressed itself to these mammoth issues as resolutely as the Administration moved to correct the adverse payments situation as the new year began, there would be less cause for alarm. The White House and Congress will have to demonstrate their responsibility by adopting the meaningful measures of restraint they dodged so distressingly in 1967.