Word: ecksteins
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Willett--whom Otto Eckstein, professor of Economics, considers one of the best-informed Faculty members on the current crisis--said he expects the Johnson Administration will stay on the gold standard and fight the gold drain...
...same time, Eckstein shows, economic growth is being maintained--stimulated in 1968 almost entirely by the private sector. In the last few years the stimulus came from Vietnam spending. This means that the increase in private demand this year will probably make up for the levelling of the total defense budget. In this sense "the economy is being weaned from its dependence on military spending," he says...
Suppose the war in Vietnam is brought to an end sometime this year. Eckstein estimates that the direct and immediate saving will exceed $10 billion as "spending for munitions, planes, helicopters, food, gasoline, transportation, and extra troops pay tapers...
...HOWEVER, Eckstein goes on in his paper to make the gloomy prediction that "much of this saving will be re-directed into the strategic components of the defense budget." He gives two reasons. First, he says, there will be a strong need to resume modernization of the defense establishment after having deferred it during the Vietnam war. Secondly, Eckstein believes that the U.S. is in Asia to stay and this will prove costly...
There will be pressures, as Eckstein points out, to divert money back into the defense establishment. The cities have to respond by mobilizing counterpressure...