A Carter administration budget official expressed pessimism about the current economy yesterday, stating that the "nature of the recovery is disturbing," with the automobile and housing sectors still stalled and with continued high inflation.
Even though the nation suffered a sharp but relatively short recesion earlier this year, there is little prospect that the rebound will produce the normal consequences of a "drastic" decline in the unemployment rate or a substantial increase in jobs, said Office of Management and Budget Associate Director W. Bowman Cutter.
But Cutter and OMB Deputy Director John White both emphasized their view that this short-term economic malaise is characteristic of long-term inflation, energy and productivity problems facing the nation, which they said are not subject to overnight solutions.
The two administration budget officials joined economic spokesmen for Republican presidential candidate Ronald Reagan and independent John Anderson, as well as other economists with sharply divergent views about future policy needs, in a day-long seminar on inflation and politics sponsored by American University's new National Center for Business and Economic Communication and the Economics Department.
By far the most gloomy outlook was not that of candidate's adviser, however. Expressing impatience with the "businesss-as-usual" approaches he said were being discussed by his colleagues on an afternoon panel, economist Gar Alperovitz declared that a "severe economic crisis," characterized by great dislocations, already has started.
Alperovitz, codirector of the National Center for Economic Alternatives, linked urban violence and discontent by minorities in recent months to the cycles of inflation that gripped the nation in the last decade.
He also forecast new warfare in the Middle East, followed by shortages of oil and the reintroduction of energy price controls.
Former OMB director and Health, Education and Welfare secretary Caspar Weinberger, speaking for Reagan, asserted that it "is incorrect to say" that oil price increases in the 1970s were the major cause of inflation. The primary cause, Weinberger stated, has been government spending -- "a parade of increased budgets . . . with a parade of rhetoric about austerity and tight budgets."
Weinberger attacked the new tax on "windfall" oil profits as a highly inflationary tax on receipts, which he said means the government will only spend more. He also vowed that one item Reagan would cut from the budget, if elected, is $100 million ear-marked to develop a standby gasoline rationing program. "It's not needed," he said.
Robert Walker, chief domestic policy adviser for Anderson, complained that both Reagan and Carter had built their economic programs primarily on promises of balanced budgets, tax cuts and future prosperity. Noting that Anderson opposes an immediate personal tax cut, Walker emphasized gradual incentives for savings, tax advantages targeted to certain industries and the Illinois congressman's proposal for a tax on gasoline of 50 cents a gallon to force conservation and bring in additional money to use for other domestic programs.