Both parties' sales pitches risk more inflation
Both Democratic and Republican presidential candidates will run this fall on economic platforms which, if fulfilled, might saddle the United States with higher builtin inflation.
This is the deep concern of many experts, including some of President Carter's own advisers, who privately deplore his acceptance of so-called Kennedy economic platform planks.
"Already," says a senior administration official, "the President went over the edge, when he agreed not to use high interest rates and unemployment as ways to fight inflation."
No matter what gloss the White House may try to put on it, this official continues, Mr. Carter's efforts to prick the inflationary bubble counted on high interest rates and accepted higher jobless rolls.
Now the President accepts the "spirit and intent" of a $12 billion job-creation package, which -- his advisers believe -- would balloon the budget deficit and spiral inflation upward.
The amount of money that can be spent to achieve the jobs goal, Carter says, "will necessarily depend on economic conditions."
This implies something less than the full $12 billion which Sen. Edward M. Kennedy and his supporters wrote into the plank. But it also implies a Carter commitment to more money for jobs.
In fact, the President's fiscal 1981 budget is virtually flat in this regard, except for some extra money to help young people acquire skills and put them to work.
GOP presidential standard-bearer Ronald Reagan and his Republican cohorts are likely to charge the President with caving in to liberal pressures, thereby threatening to engulf the nation in higher inflation.
However, the same argument about inflation will almost surely be shot back at Republicans by Mr. Carter because of Mr. Reagan's advocacy of a u percent across- the-board income tax cut next year, as the first step in a 30 percent tax trim.
Carter already argues that the Reagan tax cuts would swell the budgetary deficit by reducing tax revenues, and would feed inflation by stimuv lating consumer spending too quickly.
Reagan counters that his tax cuts would so increase business activity that people would be put back to work, tax revenues would rise, and the budget would be helped, not hurt.
"Stimulus" is a key word as well as a commitment with both men, though Reagan and Carter approach the concept in opposite ways.
Observers wonder how the President can campaign on the Democratic platform and retain credibility, since -- before his deferential nod to Kennedy's ideas -- Mr. Carter had opposed them.
He will, some say, twist top economic aides like Charles L. Schultze, Alfred E. Kahn, and James T. McIntyre Jr., into pretzels, if he expects them to support policies which they consider dangerous to the economy.
Some pretzel-bending already is going on in the White House, as the President's Economic Policy Group strives to flesh out Carter's promise of a soon-to-be-unveiled "economic renewal" program, designed to put "millions and millions" of people to work.
Those words "millions and millions" cause part of the wincing, since -- as one official puts it -- "there is no program in sight that would produce that many jobs."
Apart from anything else, says another official, a project this big requires all sorts of coordination with Congress -- budget committees, ways and means in the House, finance in the Senate -- and little of this has been done.
Currently, Mr. Carterhs senior economic advisers are huddled with him and his aides in New York -- first to find accomodative language on disputed platform planks, then, presumably, to develop concepts on economic renewal.
A part of the problem, as top Carter aides see it, is that the demands of the election campaign for concrete programs come at a time when new concepts are only beginning to be formed.
Should the federal government step in with aid to troubled US industries?If so, how and to what extent? How can decaying central cities best be rejuvenated? Which really is the nation's top economic problem -- inflation or jobs?
These issues demand creative, long-term thinking, because -- one way or another -- all of them affect the well-being of millions of Americans.
One Carter aide sees the greatest pressure on the President coming, not from Ronald Reagan, but from liberal elements of the Democratic Party, as the campaign unfolds.
"How closely," he asks, "will Kenneny supporters demand that Carter hew to the language of the minority planks, especially concerning jobs?"