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But neither Reaganomics nor any plan for restoring business stability can be expected to work like an economic Valium tablet and provide instant relief. "It took us 20 years to get into this mess," says Getty Oil Co. Chairman Sidney Petersen. "We are not going to get out of it in the next 20 months." Adds James Howell, chief economist for the First National Bank of Boston: "Wall Streeters remind me of a mother on her daughter's wedding night. They just need to be a lot calmer, and we'll get through this."
For now, though, attention is focused on current troubles rather than on latent—and later—possibilities. Millions of families cannot afford loans for new homes or automobiles. Thousands of small businesses are going bankrupt. Says Dwayne Walls, 49, a home remodeler in Chapel Hill, N.C., who is stuck with ten unsold houses because of towering mortgage rates: "I really don't see any end to 20% money. The bankers just keep telling me to hang on, but I'm just one little itty-bitty speck in this whole thing. I don't understand what's going on."
Those high interest rates have paralyzed American financial markets. Stock prices have fallen to their lowest level in 15 months, and corporate bond values are reaching record depths. Says David Jones, chief economist for the Wall Street securities firm of Aubrey G. Lanston & Co.: "The feeling in the market is horrible. Prices just keep falling. It's utter frustration. Hopelessness."
Wall Street's main concern is the bulging federal deficit, which s $55.6 billion this year and rising. Government borrowing weighs heavily on credit markets already strained by brisk demand for business loans, including the huge sums to finance megabuck corporate mergers like that between Du Pont and Conoco. The Administration has predicted that the deficit will shrink to $42.5 billion in 1982, and disappear altogether by 1984. But those targets are fast slipping away. The Congressional Budget Office forecast last week that the deficit would be $65 billion in 1982 and would total an extra $50 billion in 1984. As the Federal Reserve continues to restrict the growth of the money supply in its fight to bring down inflation, such unrelenting credit demand from the Government is bound to keep interest rates high or force them even higher. As if to underline the deficit problem, the Senate will open debate as early as next week on a bill to raise the nation's debt ceiling beyond the $1 trillion mark, a figure whose symbolism, as well as size, is certain to catch headlines everywhere.
Concern about the deficit, interest rates and the slumping stock market was enough to persuade Reagan last week to try new versions on some parts of his economic program. During a 75-min. meeting on his first morning in the Oval Office after the Labor Day weekend, Budget Director David Stockman told the President that broad new cuts in federal spending would have to be made soon if Reagan were to have any chance of fulfilling his promise to erase