Long-term inflationary trend

(Ref. 317)
Problem Components
Policy issue area: Economics
Policy issue: Monetary system
Description: Inability to manage the monetary system without unfavorable cyclical fluctuations of recessions and recoveries to control inflation.
Symptoms: High interest rates; lack of wage and price stability.
Causes: Lack of coordinated government/business policies to fight inflation; lack of an energy policy; lack of control over Congressional policies pertaining to housing, food production, health care and entitlements.
Cost of problem: -
Solution Components
Resources: Universities and research institutes; Federal government (Congress and regulatory agencies); financial institutions.
Goal: Reduce the rate of inflation as far as possible without jeopardizing other economic goals.
Program area: Financial resources development
Program-remedy: 1. "Anti-inflation Strategy," developed by the Economic Cooperation Council and the Congress (productivity bonuses, tax mechanism for limiting price increases, energy policy); reducing indexation of entitlement programs
2. Keeping Federal budget deficits at 2.5 to 3% of GNP.
Program-prevent: 1. Congressional monitoring and oversight of possible inflationary impact of government spending
2. National policy of balanced economic development and matching monetary policies
3. Reduce future inflationary pressures:
a. Expand and upgrade the housing supply
b. A program of health cost containment
c. Appropriate regulation of price fixing attempts by concentrated industries.
Cost of program: -
Beneficiaries: Participants of the economy; retirees and others on fixed incomes.

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