Government: Embattled Guidelines

Few economic experiments of recent years have been more controversial than the Government's economic guidelines, those rule-of-thumb efforts to tell U.S. workers and businessmen how much they can raise prices and wages without bringing on inflation. The Council of Economic Advisors created the guidelines* three years ago, basing them on the doctrine that U.S. wages should rise only as fast as improving technology allows industry's output per man to grow. The council's conclusion, based on long-term estimates of productivity: prices and wages should not rise more than 3.2% annually. The guidelines have remained as official policy under both Presidents Kennedy...

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