IN ANY STRATEGY to push down the inflation rate, one essential ingredient is going to have to be patience. But patience is a commodity always in short supply in American politics. At best, the decline in the inflation rate is likely to be only gradual with occasional setbacks. While everyone has seen by now the costs of high inflation, it's also true that there are real costs and hazards in a vigorous anti-inflation policy. As time goes on, that policy is not going to be unanimously popular.
The congressional recess, and President Reagan's recuperation, have brought a hiatus in the daily combat over the design of policy. It's a good moment to consider what lies ahead. There's no question of the need for a sustained effort, at last, to stabilize prices. Perhaps the optimists in the administration will be proved right, and inflation and interest rates will come down faster than forecast once the process gets started. But it's probably more realistic to follow the conventional predictions.
They warn that, by the various measures of inflation, the rate will be 10 or 11 percent this year, showing no real improvement over last year. In 1982, the forecasts show the rate somewhere in the 8 to 10 percent range and, by 1984, perhaps around 6 to 8 percent. That's an important improvement, but it's not going to happen quickly.
If interest rates stay high there will be an inevitable on the two industries that depend most heavily on credit -- housing and automobiles.In the past, Americans have generally taken it for granted that high production of houses and cars was a good thing, without qualification, and essential to a healthy economy.
But now it looks as though automobile sales are going to decline for reasons inherent in a changing market, and attempts by the government to crank up production through cheap credit would be wildly inflationary. Similarly, there's reason to think that two large a share of the country's investment has been going into residential real estate. Perhaps that has something to do with recent industrial performance. Pushing down mortgage rates to help the builders no longer seems a useful way to strengthen the economy. Perhaps a non-inflationary economy means one in which home building, cars and steel do not play so large a part.
Inflation is good for debtors. Unfortunately, the converse is also true. As the inflation rate sinks, there is going to be a severe and growing burden on borrowers like those corporations and recent home buyers who are committed to long-term debt at rates as high as 15 percent a year.
When people speak of a painful transition from inflation back to stable prices, they are not merely speaking of a cycle of slow growth after which everything remains as before. On the contrary, it means a period of prolonged financial strain that will change the basic structure of an economy that lives on credit. The transition cannot be accomplished quickly. In this attempt to reduce the country's inflation rate, the central issue is not in the details of budgets and tax bills. The central issue is political stamina, and whether both the administration and the voters have enough of it to see the job through.