Wednesday, September 17, 1975
THE MICHIuAN DAILY
Page Three
Wednesday, September 17, 1975 THE M!CH~GAN DAILY
sPaae Th#rVe
V
BUDGET OFFICE RELEASES REPORT:
U.S. faces unemploy
high prices in years
WASHINGTON (om) - The
United States is pulling out of
the worst recession since the
1930s, but Americans face un-
employment and high prices for
years to come, the Congression-
al Budget Office said yesterday.
The budget office, Congress'
counterpart to the President's
Office of Management and Bud-
get, offered two possible strate-
gies. One would speed up econ-
omic activity to provide more
jobs. The other would be aimed
at trying to hold down inflation.
FORBIDDEN to make recom-
mendations, it advocated neith-
er, but projected the expected
consequences of both.
The nation's recent surge in
prices is particularly alarming
because it has been largely con-
centrated on necessities, said
Alice Rivlin, an economist who
heads the budget office. She
told a news conference the surge
could endanger the still-young,
recovery.
"When inflation is concentrat-
ed on food and fuel, consumers
have to buy them anyway," she
said. "There is little money left
over for other purchases, and
the economy suffers."
A SECOND danger, Rivlin
said, is that continued price in-
creases will trigger another
round of large wage increases,
spinning the inflationary spiral
even higher.
"Some of the present favor-
able factor may be temporary,"
she declared.
The budget office forecast
substantial economic recovery
until at least mid-1976, but add-
ed that Americans will continue
to be plagued with the nation's
unprecedented combination of
high unemployment and high
prices at least through 1977.
BY THE END of 1976, its re-
port said, the unemployment
rate which has remained over
eight per cent this year, should
be down to the range of 6.9 to
7.6 per cent. This still would
mean seven million Americans
without jobs.
During the remainder of this
year, the report said, prices are
likely to continue increasing at
an annual rate of six to eight
per cent. A surge of increases,
especially in food and fuel
prices, brought the rate up to 12
per cent in June and July 1975,
the report said, but the rate has
since subsided - though not to
the levels of early 1975.
A speedup in economic activ-
ity, the report said, would re-
quire continuing the temporary
tax cuts in effect for this year,
reducing taxes an additional $15
billion and increasing federal
spending by $10 billion, all ef-
fective in 1976.
ADDITIONALLY, the Federal
Reserve would be expected to
allow the money supply to grow
enough to hold down interest
rate increases. The opposite
strategy would be to end the
temporary tax reductions by
Jan. 1, 1976, cut spending $5
m ent,
ahead
billion and keep monetary
growth at a relatively low rate.
The expansionary strategy,
the budget office said, would
lower unemployment by 1.1 per
cent at the end of two years -
meaning about 1 million more
jobs - but would raise the rate
of inflation for some years
ahead by a maximum of five-
tenths to seven-tenths of one
per cent.
The restrictive strategy, the
report said, would raise the un-
employment rate by nine-tenths'
of one per cent at the end of two
years and lower the inflation
rate for several years, with a
maximum reduction of three-
tenths to four-tenths of one per
cent.
Army ban
on gays
disputed
HAMPTON, Va. OP) - The at-
torney for Sgt. Leonard Matlo-
vich, an admitted gay, told an
Air Force discharge board here
yesterday that the military's
historic ban on homosexuals vio-
lates their constitutional right to
privacy.
The Air Force regulation call-
ing for automatic discharge of
gay servicemen is unlawful be-
cause it imposes "the morality
of the majority on its em-
ployes," said attorney Susan
Hewman.
HEWMAN is one of two Amer-
ican Civil Liberties Union law-
yers who are representing Mat-
lovich, 32, who has been dec-
orated during his 12 years in the
Air Force, in the hearing that
began yesterday.
Matlovich himself prompted
the hearing at Langley Air
Force Base, where he serves as
an instructor in race relations,-
when he wrote the secretary of
the Air Force in March toad-
mit his homosexuality.
His admission was designed to
produce a test of the military
regulations that prohibit the re-
tention of homosexuals by the
military once their sex devia-
tion is discovered.
THE GOVERNMENT con-
tends that the presence of homo-
sexuals in military ranks would
hamper recruitment, destroy
ASSOCIATION OF JEWISH GRAD STUDENTS
FIRST GET-TOGETHER OF THE NEW YEAR
WINE and CHEESE PARTY
Thursday, Sept. 18th-8 p.m.
at H ILLEL, 1429 Hill Street
Renew Old Acquaintances, Meet New People
PAT CARROLL
AP Photo
Sgt. Leonard Matlovich stands outside the Air Force court-
room where he faces a hearing, which was called because he
admits 'to being gay. Military law bans homosexuals from
service.
Oil sheiks weathern London
LONDON (MP) - Foreigners
hankering to sleep in a peer's
stately bedchamber proved will-
ing to part with up to $2,200 a
week for the privilege here last
summer.
Arab oil potentates with bags-
of cash, banned from their usual
summer playgrounds in Lebanon
by gunfire this year, flocked to
London instead and the rents for
stately homes soared.
"THE PRICES people were
prepared to pay broke all rec-
ords," saidtMichael Nyman, a
director of the State Apartments
agency. "There has been an in-
credible demand for the best
houses/in London."
Others spoke of Arabs - most
of them from Saudi Arabia or
from the Persian Gulf sheik-
doms - paying six months' rent
in advance with cash from suit-
cases full of banknotes. Nyman
said his agency could not find
enough homes in central Lon-
don at rents from $550 a week
and up.
A typical temporary shelter
suitable for a sheik and his trav-
eling harem - this one rented
for $990 a week in ritzy Chelsea
-might have five double bed-
rooms, two dens, a 60-foot-long
lounge, a dining room to seat 161
persons, a kitchen, three bed-
rooms, a sauna bath and bath-
room and a flat for the servants.
OTHER favored districts were
Belgravia, Mayfair, Knights-
bridge and St. John's Wood.
"We did one house in Belgra-
via for a thousand pounds'
($2,200), a week for a six-week'
period," said David Rivlin, a
partner in a rental agency. "It
was to an Arab family and they
brought their own servants.
"Apart from rich Arabs only
pop music people are in this
high rental class, paying 600 to
700 pounds ($1,320-$1,540) a
week," he added.
moraleand offer foreign agents
a chance for blackmail.
Matlovich, son of an Air Force
sergeant, showed little emotion
as the hearing - which the Air
Force said might last a week -
often bogged down on technical
issues in its opening hours.
Asked by one newsman wheth-,
er he thought all homosexuals
in the military should make
themselves known as he did, he
replied:
"That's an individual ques-
tion they must answer them-
selves." Matlovich has said he
isn't interested in becoming a
symbol of gay liberation.
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