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It’s Time to Reduce Spending

Click to see original imageSix former chairmen of the Council of Economic Advisers. at a rare meeting with the Senate Banking Committee, unanimously agreed that federal spending must be slashed. As Sen. William Proxmire. banking committee chairman, put it, the three Democrats and three Republicans represent “virtually every kind of economic view,” but in the present inflation crisis they were unanimous on a number of points. Even the Democratic liberal Walter Heller acknowledged that spending must be reduced – and more thanxsingle time “to be limited in its tendency to expand in the future.” The other exchairmen of the Council of Economic Advisers included Gardner Ackley, Arthur Okun, Herbert Stein. Paul McCracken, and Alan Greenspan. The combined tenure of the six extends back in 1961. There was unanimous agreement on the following: -That we should not have mandatory wage and price controls. – That the Federal Reserve must pursue a policy of reducing growth of money and credit. – That some method must be found to cut through the wage-price sprial – andthe tax-based income policy is one way to do it. – That we need to build into the economy incentives for capital formation and increases in productivity growth. Senator Proxmire cited two other ponts on which the group had a “preponderance of view” but not unanimity: That Congress should balance the budget for fiscal 1981; and any tax cut should be accomplished by reduced spending to justify it rather than increasing the deficit. it is obvious, from a review of the Congressional Record, that a great many lawmakers finally are highly concerned about the severity of the inflation crisis. Sen. Herman E. Talmadge (D., Ga.) expressed it this way in a short Senate speech; “The economy is near chaos. Inflation and interest rates are out of control and sky high. Productivity is rockbottom.” The comment from the six former chairman of the Council of Economic Advisers should not go unheeded in the administrations effort to find, at long last, the most effective solution.