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

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Collection: 
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
Case Number: 
Publication Date: 
May 2, 1977
Content Type: 
REPORT
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PDF icon CIA-RDP80M00165A002300020010-7.pdf143.41 KB
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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. Approved For Release 2004/02/23 : CIA-RDP80M00165A002300020010-7 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% Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 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 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 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 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 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 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7 Approved For Release 2004/02/23 : CIA-RDP80M00165AO02300020010-7