MATERIALS USED BY CHARLES L. SCHULTZE IN THE PRESENTATION GIVEN TO CONGRESSIONAL LEADERS AND CABINET OFFICIALS ON THE BUDGET OUTLOOK FOR 1981

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M00165A002300020010-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 15, 2016
• Document Release Date: January 28, 2004
• Sequence Number: 10
• Publication Date: May 2, 1977
• Content Type: REPORT

Approved For RdWse 2004/02/23 : CIA-RDP80M00165PP300020010=7
MATERIALS
used by
CHARLES L. SCHULTZE
in the
PRESENTATION GIVEN
to
CONGRESSIONAL LEADERS AND CABINET OFFICIALS
on
THE BUDGET OUTLOOK FOR 1981
MAY 2; 1977
Approved For Release 2004/02/23 : CIA-RDP80M00165A002300020010-7
 Approved For Rose 2004/02/23 : CIA-RDP80M00165PO300020010-7
The Charts attached depict the economic assumptions
underlying the budget projections to fiscal year 1981.
The economy is assumed to grow strongly over the next
four years. Real output is projected to increase at an
average annual rate of somewhat more than 5 percent. This
rate of growth would create almost 10 million new jobs, reduce
the unemployment rate to about 4-3/4 percent, and bring real
output back to its potential level by 1981. We have also set
for ourselves the objective of reducing the rate of inflation
to about 4 percent -- from 6 to 6-1/2 percent at present
If a balanced budget is to be achieved by 1981, growth
of Federal expenditures will have to be very limited
Also, expenditures of State and local governments are likely
to be a less important source of stimulus to economic expansion
than they have been over the past decade, because of changes in
population growth and age structure. Achieving our growth
objectives thus requires a strong expansion in the private
economy.
The third and fourth charts indicate the performance
required in the consumer and business sectors to achieve
our economic goals. Consumers would need to spend about
93-1/2 to 94 percent of their after-tax incomes on goods
and services, and business capital outlays (adjusted for
inflation) would need to rise at an average annual rate of
9 to 10 percent.
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 Approved For Release 2004/02/23 :. CIA-RDP80M00165AO02300020010-7
ECCONOMW ,0& oft ^
L
0
9
1977 1981
Change
Real GNP
(Billions of 1977 $) 1,877 2,298 +22%
(5.2% per year)
Total Employment
(Millions) 89.9 99.6 + 9.7 millions
Unemployment Rate
(Percent) 7
Per Capita Real Income
`After Taxes (1977 $) 6,000 7,000 +17%
(3.9% per year)
Inflation Rate
(Percent) 6 to 6%
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 Approved For Release 2004/02/23: CIA-RDP80M00165AO02300020010-7
REAL GNP
(Actual and Potential)
Ratio Scale
Billions of 1972 $
--, 1,800
1,600
Potential
GNP
Actual
GNP
1,400
1,200
1,000
800
I I i l I- I I I I I I I I I I
1961 1965 1969 1973 1977
I 600
1981
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E SPENDING RATE
Percent
97.0
Proportion of After-Tax Income Spent
?0= 77
I I I I 1 . 1 1 1 1 1 1 1 1 1 I I I I I I I I I I I I I I I
'' 1953 1957 1961 1965 1969 1973 1977 1981
95.0
93.0
91.0
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 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7
USSINESS10"A'
PIT AL OUTLAYS
Ratio Scale
Billions of 1972 $
11,000
400
200
100
50
1949
1953
1957
1961
1965
1969
1973
1977
1981
10
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 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7
Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7