Economic Perspectives, Vol. 3, No. 3, January 1979
Government: the Federal Government Shifts Gears
This time a year ago, the government was expecting a deficit for fiscal 1978 (October 1, 1977, to September 30, 1978) of $62 billion. The Administration presented Congress with a budget proposal for fiscal 1979 that implied essentially no change in the deficit that year. Nowhere in the President's Budget 'Message last January was the word inflation used. The focus was on the need for a fiscal policy that provided continuing economic recovery. Over the course of the year, however, the Administration shifted its attention from stimulating further growth of the economy to reducing inflation. The change had little effect on fiscal 1978. But it was largely responsible for differences in the planning for fiscal 1979 and 1980.