The great increase in longevity has produced a surge in the desire to accumulate assets for retirement. It has outpaced the ability of the private sector to produce assets, so we need a larger government debt.

The nominal budget is a poor indicator of the impact of government outlays and revenues.

To stick to the present situation would be something like a man who was observed in Times Square looking earnestly along the pavement. He was asked what he was looking for. He said "I lost my watch."

If unemployment could be brought down to say 2 percent at the cost of an assured steady rate of inflation of 10 percent per year, or even 20 percent, this would be a good bargain.

The great increase in longevity has produced a surge in the desire to accumulate assets for retirement. It has outpaced the ability of the private sector to produce assets, so we need a larger government debt.

The supply-side effect of a restrictive monetary policy, moreover, is likely to be perverse. High interest rates enter into costs and thus exert inflationary pressure, as well as inhibiting the expansion of capacity or the introduction of cost -reducing capital improvements.

Currently a level of unemployment of 7% or more seems to be required to keep inflation from accelerating, a level quite unacceptable as a permanent situation.