Volume 31, Number 17 · November 8, 1984
The Debtor Economy: A Proposal
By Felix G. Rohatyn
The economy this autumn is still growing, inflation is low, unemployment is down. Whether this proves the success of supply-side economics or is just another deficit-driven Keynesian recovery will be argued for years to come. It seems to me clear that the enormous federal budget deficit was largely responsible for the recovery and that it could become extremely dangerous if it is not controlled. The important question now is how the recovery can be sustained in view of all the urgent financial problems facing the economy. These include the record domestic budget deficit and the record deficit in the balance of trade; they also include a national debt that will soon amount to $2 trillion and a third world debt that will soon amount to $1 trillion. In effect, we are now borrowing heavily from our children to finance a great many expenditures we really cannot afford. This is neither moral nor prudent.
Feature, 5869 words
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