Uncertainties in the American Economy
Requirements and Risks in Easing of Strains
A decision on whether to raise federal taxes on individual and corporation income is expected to be announced soon, possibly as early as December 10. The size of the tax increase, if there is one, will reflect the Johnson administration's assessment of current inflationary trends. Some economists maintain that higher taxes are needed to bring fiscal policy into line with the Federal Reserve System's currently restrictive monetary policy and forestall further inflation. Other analysts point to soft spots in the economy and warn that a tax increase would set off a recession.
There is general agreement that the American economy, now in its sixth year of uninterrupted expansion, is beginning to show signs of imbalance ...