The U.S. is afflicted by a massive economic migraine, and more than 200 million Americans know too well just how much it hurts. Their incomes, savings and life-styles are being assailed by a whole group of aches and pains. There is feverish inflation, constriction of credit and throbbingly high interest rates. The stock market has scarcely been so shaky since 1929. Just about everybody who buys, sells, borrows or invests has that overall feeling of unease. And there is no fast, fast relief in sight.
The attack of problems seems to be almost diabolically coordinated. Inflation drives up interest rates; then money flees Wall Street to pursue the higher interest rates, pushing stock prices down further; then the high cost of borrowing and the impossibility of selling new stock issues in a collapsing market make it difficult for companies to raise the money needed to expand or in some cases even to stay alive, thus intensifying the threat of recession—or worse.
President Ford says that he is determined to cure the nation's economic headache, and to his credit, he concedes that the doctoring will be long and painful. At his first presidential press conference last week, Ford once again declared that inflation is the nation's primary problem—or, in his metaphor, "public enemy No. 1." He vowed to make a start on fighting it by cutting at least $5.5 billion out of the federal budget for fiscal 1975, now in its third month. Though he earlier had talked against "unwarranted" cuts in military spending, he asserted this time that "no budget for any department is sacrosanct, and that includes the Defense budget." When asked what advice he could give the American worker confronted by soaring rises in the price of everything, Ford offered only bleak counsel: emulate the belt-tightening example of the Administration and "watch every penny."
Dreading Retirement. For tens of millions of citizens, the admonition was not only grim but superfluous: they are already being forced into penny watching on a scale they have not experienced in decades. In the past twelve months, hourly earnings of the average American worker have climbed 7.4%, but retail prices have risen much faster; the average paycheck now buys 4.6% less goods and services than a year ago. That is a drop in the purchasing power of Americans without any parallel in the whole post-World War II period. Pensioners are caught in such a merciless squeeze between higher prices and fixed incomes that some aging workers who had looked forward to retirement are now dreading and trying to postpone it. Middle-class people are being pushed into such demeaning economies as buying clothes at rummage sales and cutting contributions to their churches. Two small but indicative examples of inflation's ravages from Boston alone: Bill Collector Brian Fairbend is having a tough time making ends meet because more of the inflation-pressed consumers he duns are willing to be taken to court rather than pay up immediately, and the sick in Massachusetts General Hospital no longer have all the sheets on their beds changed every day because hospital administrators figure that they cannot afford it.