2d Session For sale by the Superintendent of Documents, U.S. Government Printing Office UNITED STATES OF AMERICA 69 228 AA A 30 LETTERS OF TRANSMITTAL To the Members of the Joint Economic Committee: DECEMBER 12, 1966. For the information of members of the Joint Economic Committee, other Members and committees of Congress, and the general public, there is transmitted herewith an analysis by the committee staff of the potentials and problems of economic growth of the United States to 1975. This is one of a series of publications reviewing efforts of the committee and its staff to analyze trends in the economy and the possible issues which the committee and other organizations, public and private, may have to face in the years ahead. It is understood, of course, that these materials do not necessarily represent the views of the committee or of any of the individual members, nor do they contain either implicitly or explicitly recommendations as to the direction of future public policy. The intention is to aid the process of discussion and study so that by the time the issues become sufficiently pressing to require decision, there will be an increased level of knowledge and wide areas of agreement as to the solutions. In this way, we may get more intelligent decisions by avoiding the necessity for last-minute decisions and an atmosphere of crisis or extreme time pressure. The study deserves the most careful consideration by all interested in the future of public policy. WRIGHT PATMAN, Chairman, Joint Economic Committee. DECEMBER 9, 1966. Hon. WRIGHT PATMAN, DEAR MR. CHAIRMAN: The results of the study transmitted herewith indicate very strong potentials for a high rate of economic growth in the next decade; in fact, a rate substantially above the long-term rate which has been experienced in the first two-thirds of this century. This high growth rate will be associated with a number of problems, both public and private, and these materials have been constructed in such a way that they may assist the Joint Economic Committee in the years ahead to study the issues that may arise in public and private policy and contribute to their solution by early recognition and action. An undertaking such as the present long-range projection and associated policy analysis must be carefully distinguished from a flat prediction of the future. There are many unpredictable variables outside the realm of competence of economists that will affect the future course of economic events. Accurate prognostication is not therefore to be expected. On the other hand, it is most useful to attempt to project the future course of the economy on the basis of reasonable assumptions derived from past experience. This permits the development of a range of prospects for the future and an analysis of the problems that will arise because extension of past trends the future will reveal inconsistencies which will make realizatio optimum performance in accordance with Employment Act object difficult or impossible, without policy changes. For example, will happen to the fiscal budget over the years as a result of econ growth, if past trends are extended into the future unchanged, a with present policies? Will the high employment budget dev substantial surpluses which will impede the realization of full emp ment, such as happened in the late 1950's and the beginning of 1960's? By formulating notions as to the magnitude of such prosp and many others, it is possible for the analyst to assist policymal in arriving at reasonable ideas as to the scope of the programs will have to be modified or improved to offset the effect of the tinuation of past trends in the economy. The need for long-ra policy planning by both private and public organizations is accer ated by rapid technological, social, and cultural changes occur throughout the land. It would be possible to derive projections and policy analysis, s as are in these materials, on a wide variety of assumptions. We h chosen two sets of assumptions which seem to embrace the range the most reasonable prospects and because they are very useful illustrating the kind of policy issues that are most likely to devel It must be recognized, however, that from time to time in the ye ahead such studies must be checked to insure that developments not occurring that swing economic trends outside the bounds th are assumed here. The staff was most fortunate in obtaining the cooperation of t Department of Commerce in the preparation of these materials. V are particularly grateful to the Department of Commerce for maki available the professional expertise and judgment of Dr. Louis Paradiso, Associate Director, Office of Business Economics, and t services of his staff aides, Miss Mabel A. Smith and Mrs. Irene M Mattia, to carry out in a personal capacity the projections and t underlying analyses contained in this work. The Office of Busine Economics takes no responsibility for the projections and analyse In addition, we are appreciative of the work done for us by D Murray L. Weidenbaum, chairman of the Department of Economic Washington University, St. Louis, Mo., for his work on the text this study, particularly in his analysis of the policy alternatives w may face in the decade ahead. This study is undertaken as one several projects in the program of the Subcommittee on Economi Progress which have been under the general direction of John F Stark, deputy director of the Joint Economic Committee staff. I hav worked closely at all stages of the planning, execution, and draftin of this report. Other members of the staff have contributed, and th final product should be regarded as a composite effort of all concerned Obviously, there is no implicit or explicit recommendation as to policy in these materials or any conclusion of the staff as to needed directions of committee effort. Such recommendations and plans for the direc tion of committee work must be developed by the committee itsel on the basis of its consideration of this study and others on the issues of the decade ahead which have been undertaken at the committee's request. JAMES W. KNOWLES, |