President Carter committed his administration yesterday to a long-range economic target that most mainstream economists assert can be achieved only at the cost of unacceptable inflation: reduction of the nation's unemployment rate, now 7 per cent of the work force, to 4 per cent by 1983.
In endorsing the Humphrey-Hawkins "full employment" bill, Carter has flown in the face of the early advice of his economic advisers and the go-slow philosophy he expressed as a candidate during the 1976 presidential campaign.
Some fear he has embraced a convenient political symbol that may win support in the shor-run but could prove inflationary - and costly in budget terms - in years to come. Analysts say he also may be giving critics ammunition for easy political attacks.
The difficulty of achieving the 4 per cent jobless target without inflation stems from chances in the makeup of the labor force in recent years. Ten or 15 years ago, the 4 per cent goal was still regarded as realistic.
Today, however the labor force is skewed with a far greater proportion of teenagers and women - groups with chronically high unemployment. Analysts sayd you can get joblessness down onlp to 5 to 5.5 per cent without exacerbating inflation - slightly less with special programs "targeted" at youth and blacks.
Carter was aware of this problem when he entered the 1976 presidential campaign. Indeed, the earliest - and most devastating - criticsm of the Humphrey-Hawkins bill was first made by a Brookings Institution economist named Charles L. Schultze. Schultze now is chairman of Carter's Council of Economic Advisers.
In testimony before a Senate subcommittee last year, Schultze warned that "experience in the postwar period to date strongly suggests that once the overall rate of inflation edges below 5.5 per cent or so . . . inflation will begin to accelerate."
When that happens, Schultze added, "both the political and economic consequences of inflation make it impossible to achieve full employment, or once having achieved it, to keep the economy there." That criticism still stands.
And a mid 1976 study by the non[LINE ILLEGIBLE] Budget Office showed that achieving the 4 per cent target would bloat inflation by 1.25 percentage points the year the goal is achieved an 2 points the following year. Agency officials say they haven't changed their projections.
This "inflation box" is why conservative economists - and many moderates as well - have been wary of setting numerical targets of any sort. Alan Greenspan, President Ford's economic adviser, advocates "testing the waters" by reducing joblessness gradually below 5.5 per cent.
Carter himself assiduously avoided tying himself to the bill during the early days of his campaign, despite heavey pressures to do so. It was only after his stray remark about "ethnic purity" forced him to make a gesture to blacks that he finally pledged to work for a compromise.
In fact, Carter's whole approach during the campaign was quite the opposite. The candidate proposed quick shor-term stimulus to provide renewed economic growth that in turn would generate added tax revenues to finance his new social proposals. But progress was to be gradual.
To be sure, the measure Carter embraced yesterday is somewhat less restrictive then the election-year version introduced in 1976. In one key difference, the new bill no longer mandates specific job-creation programs and costly new aid cities.
But the legislation still requires that the President aim for the 4 per cent target, and set "interim" goals between now and 1983 to push the economy toward it. And it mandates that Carter list tax-cut and spending proposals each year designed specifically to carry these out,
As economists points out, achieving such year-by-year targets is a precarious job on its own. But what happens if, as seem more than likely, the administration in unable to meet its goal one year? Must it then go even faster the following year in order to catch up?
There is also the cost factor. The earlier version of the Humphrey-Hawkins bill which prescribed specific job programs for the administration to propose, was estimated to cost between $26 billion and $28 billion. The price-tag on yesterday's measure is uncertain.
The administration tried yesterday to put a brighter face on the venture. A new Labor Department analysis contends the jobless rate can be pushed down to 4 per cent by 1983 because teenagers will make up proportionally less of the labor force by then.
But most economists remain unconvinced.
As a result, Carter is faced with two choices:
He can take the measure seriously and propose the new programs needed to achieve a 4 per cent jobless rate - a move analysts say would be certain to spur new inflation and invite further credit-tightening by the Federal Reserve Board.
Or, he simply can dismiss the 4 per cent figure as a symbolic statement, and seek ways to circumvent the targer (at the administration's request, there's a bailout clause allowing Carter to propose changing the targets after the third year if they prove to be unrealistic). In that case, his endorsement of the measure yesterday - and the promises implied in embracing it - could lead to charges that the program is a fraud.
What most observers are betting is that the President will find excuses to portray the new 4 per cent target as simply symbolic, and not legally blinding - and that the Humphrey-Hawkins bill ultimately will have little real impact on policy.
"Pragmatism simply is going to have to win out," mused one respected analyst here. "If this bill had been in effect last summer, do you think it would have presented Carter from withdrawing his $50 tax rebate proposal when he thought it wouldn't pass?"
If that turns out to be true, many Carter supporters fear the bill may prove to be a firing-peach for the President's more liberal opponents. "Whenever they think he's going too slow, all they have to do is hold up those targets," one onlooker says. "He's always going to be vulnerable."
But the dilemma still is that the numbers are unrealistic. "The fact is, we just don't know how to get the jobless rate down that low," says one well-known liberal economist. "And anyone who endorses Humphrey-Hawkins is either fooling himself or the public."