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Show THE VOICE OF BUSINESS Jus to set the record straight... By Richard L. Lesher, President Chamber of Commerce of the United States In 1976, while campaigning for the presidency, Jimmy Carter was asked what his economic priorities would be. In a startling and most revealing response he said: "(I'd). .. take my chances with inflation if I had to." He did. Today, four years later, the rate of inflation has nearly tripled, and the latest Consumer Price Index shows inflation rising at an annual rate of 18 percent. Mr. Carter admits this disastrous situation has reached the "crisis stage." But he claims; "The basic policies that we have espoused suit me fine." Rather than get involved in any second-guessing, let me simply present Mr. Carter's own arguments, followed by what most economists agree are the facts. Then you be the judge. Mr. Carter on inflation: "This is world-wide, awful basic problem," due largely to skyrocketing oil prices. The U.S. is "caught up in circumstances over which we have very little control." Item: The U.S. imports less than half its oil, with, as noted, a rate of inflation currently increasing at an 18 percent clip. But WestC-ermany and Japan, which must import nearly 100 percent of their oil, both have inflation rates of less than 7 percent. Switzerland, which imports all its oil, actually saw its January inflation rate drop from 5.2 to 5.1 percent. Mr. Carter on spending: "We have had a tightly restrained budget," and "...there is no waste in it that we could possibly eliminate." Item: Federal spending during the last three fiscal years has shot up by 40 percent; it will increase this fiscal year by nearly 15 percent, a rate exceeded only once, (1967), in the past 25 years. The President's proposed budget for fiscal 1981 shows an increase in federal spending of 16 percent tTnr, origianlly proposed 1980 budsj; billion. Joseph Pechman, a Z liberal economist from the & Institute, labels it "fiscally 3 sible." A top official t Congressional Budget 0ffice,! "verv little evidence" a , 11 straint. 9 s Item : A recent report by the a Accounting Office conclude dollar losses from fraud and t could go as high as 10 perantJli programs-i.e. approximate!,; billion. GAO even admits- v portunity for defrauding the c 'J ment is virtually limitless." Mr. Carter on the size of thefe. bureaucracy: "...we have lowerJ; number of federal employes below what they were when 1 ! here." Item: Official figures from , Department of Labor show then"-' of federal employees has increas 58,000. Mr. Carter on the deficit: slashed the deficit down substanti Item: Mr. Carter's estimate eit' federal borrowings which are off,.;' classified "off -budget," but whi still directly financed by the Trcg-It Trcg-It includes assumed budget red, that are nonexistent, hi rei: economists believe the defurjj i fiscal 1980 and 1981 could be at lea-billion lea-billion higher than the Admin publicly admits. Significantly, high deficits have been occurri-period occurri-period of peace, relative prosper high employment a time v. historically, budgets should 1 surplus, or at least in balance. Mr. Carter on taxes: "We're j successful in reducing income j since I've been in office." Item: Tax receipts in 1979 by approximately $440 per rra Overall, individual income during the past three years irr-vj at one of the fastest rates in pcr history. Since 1977, receipts ; personal income taxes have p over 50 percent a rate of iareL-exceeding iareL-exceeding that of either i; prices. Item: In other areas. Social Sc: and oil excise taxes, Mr. Care proposed and w on approval for tax increases than any Pres::-r peacetime history. He has cc efforts to: Reduce individual ta -index tax gains and reduce icier.: taxes on family businesses. So. it would seem that there ss an inability or an unwillingness : President and his advisors t derstand inflation. The Prefix been fed bad policy and false riJ It now appears that Congress isn : try to come to grips with the niz of inflation federal spend:r$-n -without participation bv lis ministration. If this happes ' sumers. taxpayers, labor arc tei will all benefit. L |