The Economy: The Specter & the Substance

Treasury Secretary Henry Fowler was as blunt as he was gloomy. Failure to enact a 10% income tax surcharge, he told Congress last week, would leave the U.S. with "an economy in shambles." Without higher taxes, insisted Fowler, the nation faces "the biggest deficit since World War II, an overheated economy and spiraling inflation, sky-high interest rates and tight money for all borrowers."

Economists, business, labor and financial leaders have all been sounding the same theme—but mostly in a quieter key. Abruptly and decisively, coping with inflation has become the prime concern of U.S. businessmen. What was only...

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