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Show yflfflfiTfljj J George Hagedom If you undertake a serious appraisal of the economic outlook over, say, the first half of the 1980s, you must start by answering one critical question: What, if anything, w ill the United States be doing in coming years to eliminate the inflation which now grips us so firmly? It seems clear that, if you start w ith the assumption that nothing effective will be done to curb inflation, you will have to conclude that there w ill be further deterioration in the economy. The practical cessation of productivity growth in recent years is a demonstration of the inefficiencies inherent in an inflationary economy. Also, t have to reckon with the fact that inflation, untreated, tends to get progressively worse. Even if you take the opposite side of the argument and assume that what needs to be done to stop inflation will be done, you have to recognize that our economic troubles are likely to be worse for while before they get better. As in the case of an alcoholic binge, the worst effects of inflation arc felt, not while you're indulging but after you've stopped. Recently, inflation seemed about to enter its most lethal phase the phase when it becomes self-accelerating. The drastic monetary measures taken by the Federal Reserve System, as announced t Chairman Volckcr on Oct. 6, may have pulled us back from the brini . . curbing inflation is going to hurt. . . " at the last possible moment. But this is strong medicine and, as have already seen, it has distressing side effects. Furthermore, on dose won't cure us of inflation and we will have to be taking th medicine for a long time intathc future, rutting it blunilv, curbinf inflation IS going to hurt M anJ om an cxtctvW (imf Ihe present year has been one of continuous talk about iws However, as ot this writing, broad measures of production a) employment have shown no downturn. Clearly the fact that we have avoided a downturn through the fir three quarters of 1979 cannot be taken as evidence that ihe economy .s strongly based and can continue the same pattern indefinitely. Vv hat wc have been seeing is an economy sustained, termxiranlv. I? he anticipation of further inflation. "Buv now. it will nv atcr seems to be the universal rule. An kvnomv mainuunrd high level on that shaky pillar is clearly due for a fall Hemg an optimist. 1 assume that the Umtrxl States will lakt M s necessary to cu.b inflation during the firs, half of the W in Z ' lKCKniK thM ,his Period of slow eevnon SrIC,l,,nm,l f"irly KXCtt t vcar .nJ a i t1 I 11,C l"'"lymcm rate will pcrt at Ic Sua llv . f V n Uc W N c w nl SCC'" hih in vean, of the to I ii sfren'.!? " "T "r"1 V' . .he economy w ill hr re,- U r ik-Tst lT C!il1Ubl,sWn f n inflation fi p- Ure.,,c r stabdity d better P,xhUk viy gIVU,h in thp Utrt ,4 |