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Nixon has quite a bit of room for some mildly deflationary measures because unemployment is so low. Encouragingly, economists of the Johnson Administration believe that the wage-price spiral eventually can be restrained by permitting unemployment to climb back to a politically acceptable rate of about 4%, and letting it hover there for a while. But, warns Arthur Okun, the outgoing chairman of the President's Council of Economic Advisers: "If ever there is going to be a year of bliss for the American economy, it will not be 1969."
Yet for all its imbalances, the economy seems healthy enough to continue expanding despite obvious problems and pressures. In 1969, the U.S. is likely to experience more of what it has had for the past eight years: continued monetary alarms and inflation at a somewhat lower rate—but no recession.