PERHAPS IT'S NOT going to be enough to balance the federal budget. Perhaps the budget is going to have to run a surplus. Alan Greenspan, the chairman of the Federal Reserve Board, lobbed that unorthodox suggestion into public view in a speech this week in New York. No doubt his immediate purpose was to press Congress to get on with this year's rather feeble contribution to reducing the deficit. But he was speaking an important truth that is going to haunt the next president.
Americans are saving perilously little of their incomes. If people won't save for themselves, Mr. Greenspan said, perhaps their government will have to do it for them. That's what a government surplus is -- public saving.
Private savings in this country, by both businesses and individuals, has been falling precipitously. But savings has to equal investment, as the textbooks point out. Over most of the Reagan years, a huge inflow of foreigners' savings has maintained the balance. Now the foreigners have backed off. That's why the dollar has been falling.
There are three ways to restore the balance. The worst is to let investment decline with savings. That means a recession. Another is a rise in American interest rates to levels high enough to attract the necessary funds from abroad again. That probably means a recession as well.
The third possibility -- the only one consistent with stability in the American economy -- is to get savings up. That's what Mr. Greenspan had in mind. The Federal Reserve has a better grasp of the international financial system than any other agency of the government, and it is not under election-year constraints in discussing those realities. The Treasury is tactfully avoiding all subjects that might indicate a need for higher taxes, and the president's Council of Economic Advisers seems to have been locked in a White House closet for the duration of the campaign.
The Reagan administration's original supply-side strategy held that tax cuts would set off a great surge of savings and investment. But things haven't turned out that way. Despite extraordinarily powerful incentives -- the tax cuts, combined with high interest rates -- savings sagged. Instead, Americans went on a tremendous boom of consumption and borrowing. That's now coming to an end.
Mr. Greenspan is pointing out one way to get the American economy back into balance. You may be tempted to say that his proposal, a federal budget surplus, is politically unrealistic. Maybe so. But the other ways of getting back into balance are much less pleasant, and in the absence of rational policy, the markets will impose them automatically