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But, in the short run, as a "shock absorber" and "automatic stabilizer", low inflation may be a valuable counter-cyclical instrument. It constitutes a disincentive to save and an incentive to borrow, to consume, and, alas, to speculate. "The Economist" called it "a splendid way to transfer wealth from savers to borrowers." The connection between inflation and asset bubbles is unclear.
Nevertheless, I urge Congress to enact a permanent stand-by counter-cyclical program, so that States and cities can be protected during the next economic downturn. Three years ago, I proposed the Nation's first comprehensive urban policy.
Last year, I proposed that Congress enact a $1 billion counter-cyclical fiscal assistance program to protect States and localities from unexpected changes in the national economy. I, therefore, have not included funding for counter-cyclical aid in my Fiscal Year 1982 budget.
Last year, I proposed that Congress enact a $1 billion counter-cyclical fiscal assistance program to protect States and localities from unexpected changes in the national economy. I, therefore, have not included funding for counter-cyclical aid in my Fiscal Year 1982 budget.
Nevertheless, I urge Congress to enact a permanent stand-by counter-cyclical program, so that States and cities can be protected during the next economic downturn. Three years ago, I proposed the Nation's first comprehensive urban policy.
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