Firms would be given initial entitlements to gross markup on the basis of past performance, adjusted by changes in labor and capital inputs. This is somewhat similar to the definition of normal profits under some versions of the wartime excess -profits tax. Entitlements would be transferable and a competitive market established.

Larger deficits are necessary and proper means to mitigate unemployment as the far greater evil in terms of human welfare.

There is no real justification for a requirement that a budget of any sort should be balanced, except as a rallying point for those who seek to hamstring government.

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.

Practically, the desirable situation ought to be one in which any reasonably responsible person willing to accept available employment can find a job paying a living wage within 48 hours.

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 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.