| Abstract: | During 1953 through 1979 estimated, the U.S. economy has exhibited a roller-coaster economic performance–six periods of inadequate upturn, stagnation, and recession, with a chronic rise in unemployment because each upturn at its peak has tended to leave us with more unemployment than the previous one. During the period as a whole, we have forfeited 7.1 trillion 1978 dollars in GNP and 80.8 million years of civilian employment opportunities, and consequently lost about 1.8 trillion dollars in public revenues at all levels, with severe neglect of national priorities, and chronically rising Federal Budget deficits. This sorry record is due primarily to reliance upon a “trade-off” between unemployment and inflation. But empirical evidence for more than a quarter century has demonstrated that inflation rises as unused capabilities increase and vice versa. The annual inflation rate during the first half of 1979 exceeded 13 percent despite recession; it ranged from 1.6–3.0 percent during periods close to full employment. We now need thorough reconstruction of national economic policies, including abandonment of (1) the unemployment-inflation “trade-off,” (2) attempts to balance the federal budget at the expense of the economy and the people, (3) the prevalent monetary policy with soaring interest rates, and (4) excessive reliance on tax reductions in lieu of increased public outlays or investment. These changes would replace improvised and frequently conflicting national economic policies with comprehensive and coherent efforts. All this is in accord with the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978 |
