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根据以下内容,回答题。Text 1
Inflation has just exploded. The real problem is that we have an underlyingrate of inflation--an impetus of wages chasing prices--of maybe 9percent that is heading towards 10 percent. There also have been tremendous shocks inenergy, food and housing prices, making it worse.
By the end of the year, we will be in asituation where year in, year out, we can look forward to at least 10 percent inflation. And the question will be: How much worse willoil, food and housing prices make that?
The situation has degenerated to the pointthat the only way to turn it around is to think of some very extreme changes in policy. A policy of gradualism, where you're talkingabout a mild recession and another 1 to 2 million people unemployed, won't makemuch difference. Postponing action justmeans that inflation presses further and is even more difficult to deal with.
You have to start with revenue and monetaryrestraint. All the burden now is onmonetary policy. We should shift to a much more restrictiverevenue policy and an easier monetary policy. To be significant ,the 1981 budget should becut by at least 20 billion dollars from 616 billion President Carter proposed. That's a major cut in government programs--andvery hard to do. It's impossible if yousave defense and all the programs indexed for changes in the cost of living.
So it means cuts across the board in everyarea--including the indexed programs, such as Social Security and food stamps. State and local-government revenue-sharingprograms are another major candidate. You've also got to reopen the 1980 budget andcut that.
Then I would favor wage and price controlsto break the impetus of the wage-price interaction.
In order to get quick results, I'd set thestandard around 5 or 6 percent for both wages and prices.
Basically , you're aiming to cut the rateof inflation in half the first year. There would be no exceptions , but you wouldfocus on large corporations and major labor settlements.
For the special sectors where thebig shocks have occurred, controls won't work. Instead, you need additional policies in each one ofthose areas.
There are no cheap or easy solutions to theinflation problem. My answer is to takeall the things that everybody wants to do, and instead of choosing among them,do all of them. We've got to think interms of a comprehensive program.
In the author's opinion, the high inflationrate in the U. S. was accompanied by A.energy crises.
B.mounting wages.
C.housing shortage.
D.shrinking market.
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