That seemingly inexhaustible engine, the U.S. economy, last week ticked off yet another record. It completed 80 consecutive months of expansion, equaling the war-fueled record set between 1939 and 1945, and showed no signs of pausing. Later this month, the nation will pass two other important statistical bench marks. At midmonth, the gross national product will top the $800 billion level; the $1 trillion mark is certain to be reached in the early 1970s. And on Nov. 20, at precisely 11 a.m., the Census Bureau's population clock, which records an additional American every 141 seconds, will register 200 million.
The three milestones have profound implications for the future course and quality of American life—and of America's relations with the rest of the world.
A nation that, with 6% of the world's population, can outproduce all the Communist countries combined and account for more than 42% of the entire output of the non-Communist world, is bound to be envied, feared and often hated. But it is also bound to be emulated, particularly when its performance is compared with that of the world's other superpower. With 30 million more people than there are in the U.S., the Soviet Union (see cover story) has a G.N.P. that is less than half as large as America's.
Cyclical Roller Coaster. The 80-month U.S. boom reflects a climate of growth, but also stability. A notable measure of that stability was the willingness of the Ford Motor Co. last month to guarantee up to 95% of the annual wages of workers in what has historically been an unstable, layoff-prone industry. Since 1834, the U.S. economy has ridden the cyclical roller coaster through 31 booms and busts. Nobody is willing to predict that cyclical peaks and troughs can entirely be eliminated. But many economists are convinced that with prudent and prompt cooperation between business and Government, business and labor, and President and Congress—lately, a big if—they can be flattened out considerably.
Since the expansion began in
February 1961, the G.N.P. has increased by a staggering $285 billion (more than the combined 1966 production of France, West Germany and Italy). 9,000,000 new jobs have been created, consumer income has risen 40% and consumer spending 46%.
But the boom has not been a one way ride on the gravy train for everybody. An increasing amount of time is being lost in strikes—most recently in the auto, steel-hauling and copper industries. Unemployment is down to 4.1%, from 7% at the beginning of the upsurge, but it has risen in the past year. On Wall Street, the stock market took a toboggan ride last week, with the Dow-Jones industrial average plummeting 31.56 points to a five-month low of 856.62. Though price increases had been held to 1.3% a year for nearly five years, they have averaged more than 3% for the past two years and inflation is once more a real threat. If, as seems probable, the 7% settlement at Ford sets a pattern for other industries, that threat will be heightened.