The Economy: To Cool a Fever

After seven fat years, the greatest danger confronting the U.S. economy is not seven lean ones. Warned Lyndon Johnson last week in his annual Economic Report to Congress: "The pace now is—and in the months ahead will be—too fast for safety." Agreed the President's Council of Economic Advisers in a supporting statement: "Whatever additional gains in output and employment might be obtained during the inflationary boom would be paid for many times over in a subsequent bust."

Johnson and his advisers buttressed their case by noting that while 1967 began slowly, the pace quickened so much that interest rates,...

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