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Show 41 The Salt Lake Tribune, Sunday, August 2, 1978 soer.d r.o:e. The money supply is pd'sie Unless businessirn are willing to borrow, tne in- - Rea-sorir- boo't in federal sper d.: actively adds to demand. ctea-e- d power of banks will lie tallow. But a le'-dj-- L'l&iness Outlook V Nixon Advisers Differ on Jobless Solution; v Os V1 By J. A. Livirgston and adds to inflation. 2. Unemployment, which is TdJO'r Pure Business Wri'cr high at 4.7 perunacceptab'y of President Nixon's cent and is likely to rise. The trtu-fefriends and advisers full employment rate upeul Y. MiOarken, chair-o- f is 4 percent or less. tlie 3. Influt'on. Recently it had CSxn nr il of suitsided slightly from a I lii'omic to about 5 annual rate peuent and percept. Still, it eats into the M,i h u r F. e of workers, generdemands for higher ates the and thereby pushes up wages, 1 e a r Fvb co'-t- s and prices. Board 4. Lagging industrial activi-- 3rns at odds ty. Production has been in a oI,kiw to 7 decline for II months. This e u nem-phheightens unemployment tenmerit withsions. out remflanung Inflation. they separate over monetary Bums policy, sphere of power. McCracken told members of tne Joint Economic Committee that he'd like to see a moie rapid growth in the money supply." This is the money you, I and corporations have to spend. The Federal Reserve can boost the money supply" by speeding the flow of reserves to commenced banks. Banks then can increase loans. When loans increase, borrowers get check bank deposits which they then money spend. This adds to the money supply. Higher Rate of Growth Ko take-hom- Re-atf- re-0- ij Vs Burns: Present is 1 Economy Behind The economy is just about a year behind itself. The economic turndown has produced a 4 percent gap between the nation's economic potential and output. This is the root of the MeCracken-Burn- s policy difference." Both are agreed that finally the stubborn inflation is model ating and that a recovery in business is likely sometime this year or early next. But mone-C"'C10li- just about light. It's too e;piies McCracken: 3 If Presidents Au? advisers with contradictory because they are in by these con'ra-dttjr- y problemr : fojie unfinished business lAtjetnam, which saps the ri54isg economic strength 0L,t augUprs To McCracken, the 4 percent increase in the money supply (which Burns thinks is just about right) is only enough to accommodate ihe normal grow tli economy's rate. And, as he sees it, todays level of unemployment requires a higher rate of growth. Here's the arithmetic. Normal economic growth requires RICAN rAMf kSJSJANDARlI Tltf (iVI MAT IN Till Utalin Tapped mjii! a 4 percent increase. On top of that, a 3 percent inflation ought to be allowed for. That makes 7 peicent. But slack has to be taken up perhaps at a rate of 2 percent per jear, so that full employment the nation's full potential can in 11)72. That implies a 9 percent expansion in the money supplj. Tha--e are just numbers 4 or 7 or 9 percent. Nobody, including McCracken,' can be dogmatic on the ideal rate to achieve the objective: Growth The Perfect without inflation. Indeed, growth can occur without a jump in the money supply. If corporations and individuals use money more efturn over deposits ficiently more rapidly a static money supply will accomodate rapid growth. Some economists, such as Paul A. Samuelson, of the Massachusetts Institute of and Cardner Technology, Ackley, of the University cf Michigan and a former chairman of the Council of Economic Advisers, are more concerned about fiscal policy. They think President NLxon , Combination of Seclusion, Beauty and Convenience Built & Presented by Equity Realty & Const., Inc. 2 P.M. 7 P.M. 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