Former Federal Reserve Board chairman Arthur Burns, warning that such action would do little more than "frighten people," said yesterday he doubted President-elect Reagan would declare an economic emergency when he takes office next month.
"It's not a good idea, in my judgment, and I doubt very much it will be pursued," Burns told a news conference.
The president-elect is being urged by some of his economic advisers to declare a national economic emergency as soon as he takes office in an effort to convince the nation, particularly the financial markets, that he is serious about dealing with inflation.
President Carter, talking to reporters yesterday in Plains, Ga., echoed Burns' belief that Reagan would not declare an emergency. "I don't think that ought to be done and I don't think it will be done," Carter said. During the past week, several Carter economic advisers have been attacking the idea of declaring an economic emergency as unwarranted.
Rep. David Stockman (R-Mich.), designated by Reagan as director of the Office of Management and Budget, and Rep. Jack Kemp (R-N.Y.), cosponsor of the Kemp-Roth tax plan, have warned the incoming administration it may face an "economic Dunkirk" that includes high interest rates, high inflation, an economic downturn and a federal budget that is out of control. They urged the incoming president to declare an emergency period to deal with these problems.
Burns said yesterday he agrees with the idea that the nation's problems should be given priority, but said a declared emergency was not the way to do it. A declared emergency would "frighten people, and why do it," he said, adding that such action should be saved for a time when there is a true emergency.
The former Fed chairman, who served during both the Nixon and Ford administrations, also disagreed with the need for the new president to convene an economic summit soon after taking office -- another idea that has emerged from the Reagan camp.
Burns' comments came as he released a bipartisan study conducted for the American Enterprise Institute on ways to combat inflation. Five former Treasury secretaries -- including Henry Fowler, who presented the study with Burns yesterday -- were involved in the project.
The study made nine basic recommendations generally along the lines of economic solutions being offered by various conservative economists in or around the president-elect. Recommended were:
Legislation to cut fiscal 1981 budget by 2 percent.
Revision of the federal budget process to require a balanced budget unless otherwise voted by Congress.
Creation of a commission to explore ways to reduce the economic impact of federal entitlement programs.
Monetary policies to reduce the growth in the nation's money supply and the growth of bank credit.
Reduction of anticompetitive federal regulations.
Reformation of public health and safety regulations to make them economically feasible.
Encouragement of creation of labor-management councils to work for increased productivity.
Early decontrol of oil and natural gas prices.
Most of the proposals presented in the AEI study yesterday have been endorsed in one form or another by the president-elect during his campaign. Reagan has not addressed the question of natural gas decontrol nor has he recommended legislation to balance the budget or labor-management committees to deal within the problem of lagging productivity. In all three areas, however, he generally has favored the concept expressed in the recommendations.