Word: volckerism
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...White House aides, Administration economic advisers, Cabinet officials and members of Congress. Says Correspondent David Beckwith, chief Washington-based economic reporter: "The beat mainly involves four men and the organizations they head-David Stockman and the Office of Management and Budget, Donald Regan and the Treasury Department, Paul Volcker and the Federal Reserve, and Martin Feldstein and the Council of Economic Advisers. When a story focuses on one of them, you always have to talk to the other three." The prune focus of this week's story is CEA Chairman Feldstein. To get a feeling...
Ronald Reagan's 1985 budget took a thunderous shelling last week. Day after day, jittery Wall Street investors fired sell orders, hitting stock prices with their heaviest declines since 1982. Testifying in Washington, Federal Reserve Chairman Paul Volcker fired the single most damaging salvo by warning that the deficits envisaged in the budget pose a "clear and present danger," threatening to keep Interest rates high and tip the economy into a new recession. Vote-conscious Congressmen attacked the budget from all angles. And throughout the barrage, Administration officials were hunkering down behind sandbags...
...keeps the money supply tight, interest rates will rise as the economy expands and the credit needs of private business collide with heavy Government borrowing. But if the Reserve Board lets the money supply grow fast enough to accommodate the deficit, inflation will probably be rekindled. Volcker has pledged that he will not give up the progress against inflation that the U.S. achieved at the cost of a deep recession. Because of his tough monetary stance and the economic downturn it generated, the increase in the Consumer Price Index dropped from 12.4% in 1980 to 3.8% last year, the lowest...
...answer to the deficit problem, said Volcker, "is not easier money." The Reserve Board announced that its monetary targets will be slightly stricter this year than in 1983. Its goal for M 1, the basic money supply, which includes mainly currency in circulation and checking accounts, will be 4% to 8%, down from 5% to 9% last year. Said David Jones, chief economist of Wall Street's Aubrey G. Lanston investment firm: "The Fed has thrown down the gauntlet to the Administration, saying, 'We will not monetize the deficit even if this is an election year.' " Volcker...
...testimony before Congress last week, Volcker backed Feldstein's approach to attacking the deficit. Said the Federal Reserve chairman: "If you can not do it on the spending side, you have got to do it on the revenue side." Volcker said that the economy could absorb a tax increase of about $35 billion without danger to the recovery...