From an article by Arthur F. Burns, former Federal Reserve chairman and ambassador to West Germany, in The AEI Economist, a publication of the American Enterprise Institute.
Recognition is spreading in much of the world . . . that a system based on free markets and individual incentives can foster economic growth and the general welfare more effectively than a governmentally dominated system. This presents a unique opportunity to enlightened citizens everywhere, and most of all to the leadership of the major industrial countries. . . . try in the world can contribute to a healthier international economy, but the greatest contribution must come from the foremost capitalist nation -- the United States. The enormous fiscal deficits that the United States has been running in recent years serve as a poor example for the rest of the world, besides endangering its own economic future. By proceeding resolutely to reduce its projected budget deficits, a larger part of America's savings would become available for private investment. With governmental demands on capital markets diminished, fears of inflation would lessen, and real as well as nominal interest rates would extend their recent impressive trend toward lower levels. . . . Fortunately, the United States is moving . . . toward restoration of fiscal discipline. The legislation already passed by the Congress last year assures significant reduction in the federal deficit. President Reagan and members of the Congress agree on the vital need to go further in that direction this year. While they still differ on how best to proceed, it is reasonable to expect that they will reach a compromise within the next few months on a credible plan for eliminating the federal deficit by the end of this decade.