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.

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."

Balancing a nominal budget will solve nothing, and attempting to achieve such a spurious balance will produce much mischief.

There is no reason inherent in the real resources available to us why we cannot move rapidly within the next two or three years to a state of genuine full employment.

I define genuine full employment as a situation where there are at least as many job openings as there are persons seeking employment, probably calling for a rate of unemployment, as currently measured, of between 1 and 2 percent.

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.

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