Masonry Magazine September 1968 Page. 11
Washington Wire
War. Easier money should foster mortgage lending, too -with more funds available and at lowest interest rates. The experts expect these factors to start appearing near the year's end. But building will need time to get rolling and won't hit stride till spring.
Admittedly, the trend in building-permit applications is down, and this is a more important indicator than housing starts. But that reflects first-half's tight money, which is easing.
THE 1969 TURN-AROUND WILL RESULT FROM A CONVERGING
of plus-factors. For one thing, the surtax is due to expire on July 1-if no crisis erupts. Inventories will be back in good shape-and industry will want more plant to meet the resurging demand especially if there is progress on peace.
Here is the way economists look at the prospects for 1969:
-Total output of goods and services Gross National Product will rise 5% or so or 2% after allowing for higher prices. This year, the figures point to 82% and 5%, respectively.
-Production will be up only 4% this year. barely 2% in '69.
-Housing starts will top this year's 1.4 million by 250,000.
-Retail sales will grow a modest 4%-half this year's rate.
-Consumer prices will rise 3%, compared with this year's 42%.
A JUMP IN DEFENSE SPENDING ISN'T LIKELY,
as a result of Russia's move into Czechoslovakia. That's the view of top Pentagon officials these days, now that the dust has settled and the matter can be studied in perspective. The Soviet's invasion was a confession of weakness, not a sign of strength. It reflected a desperate step to keep the Communist empire from crumbling not the sudden resurgence of the old Soviet dream of conquering the world.
But the take-over could affect U.S. defense spending plans. It will blunt the arguments of those who want a reduction in spending for arms, and a pull-out of troops in Europe. A start on the anti-missile defense system is more likely.
THE TWO KEY CANDIDATES OFTEN THINK ALIKE ON BUSINESS
and the economy, to judge from the views of their economic advisers. Both Nixon and Humphrey realize there are no easy, simple solutions to the major problems of the day. They are both men of the 20th Century. They appreciate the vast influence that the Federal Budget has on the economy on jobs growth... and prices.
But there would be important differences in emphasis, quite crucial differences, at times. Humphrey would tend to act quickly, ready to involve the many resources of government. Nixon would be more restrained in employing Federal power.
HUMPHREY WOULD KEEP THE POLICY-AND POLICY-MAKERS
of Lyndon Johnson. Не believes in the "New Economics" using tax, spending, and credit changes by the government to stimulate national growth and foster full employment. The roll-call of Humphrey advisers includes many names prominent under LBJ, including Waltere Heller, former Chairman of the Council of Economics Advisers and Charles Schultze, director of the Bureau of the Budget until last year.
Humphrey's thinkers would urge use of large Budget deficits to stimulate a lagging economy. He would raise income taxes to cool off an overheated situation more quickly than Johnson. He may favor keeping the 10% surtax in force past July 1st. He'd want the revenue for his "Marshall Plan for the Cities."
HUMPHREY IS NO ENEMY OF FREE ENTERPRISE
despite his liberal record. (His radicalism has mellowed during his four years as the Vice President.) He favors incentives to business to get its help in providing ghetto jobs. But he is likely to back plugging alleged loopholes in corporate tax laws. And he would veto tariff increases and import quotas just as Johnson did.
The Democratic nominee would probably try to keep a rein on defense expenditures, once the fighting in Viet Nam is over. He is looking forward to channelling those military resources to an attack on domestic problems-jobs, housing, education.
NIXON, AS NOTED, WOULD NOT REJECT ALL THE THINGS
Humphrey would favor. He would not slash Federal spending deeply or quickly, or lop off U.S. jobs. Certainly, he wouldn't chop defense outlays fast, after the Asian war ends. He's more likely to endorse the full $40 billion antiballistic-missile net. The GOP candidate wants to build up national defense to bolster U.S. power.
YOU COULD EXPECT A MORE MODERATE RESPONSE
to basic economic problems from a Nixon Administration as reflected in his broad spectrum of advisers. One advocates a flat return to unrestricted, unregulated "laissez faire." Others resemble toned-down versions of those Democratic "New Economists."
These economists might persuade Nixon to go along with at least a modest deficit in a business dip -but nothing like $25 billion of 1968. They'd want the surtax to end in '69.
NIXON WOULD TRY TO DECENTRALIZE
to shift some problems to the states. He supports the Republican plan to share Federal taxes with local governments. He thinks many issues education, welfare-are best met at the local level. And government programs would be re-structured to involve private enterprise.