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. NAL CENTER 1! INTERNATIO ADVERTISING IN THE MICHIGAN DAILY DOESN'T COST .. . IT PAYS I 764-0554 IN h~metTogqy A Musical Spoof for Mystery Lovers Fun For the Entire Family SEPT. 19, 20, 21, 1975 ALL EVEN I NGS: 8 SUNDAY MATINEE: P.M. 3 P.M. Advance s a t e s throug~h PTP Ticket Office located in lobby of Mendelssohn T h e a t r e BIdq. 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