Milestones to the Future

That seemingly inexhaustible engine, the U.S. economy, last week ticked off yet another record. It completed 80 consecutive months of expansion, equaling the war-fueled record set between 1939 and 1945, and showed no signs of pausing. Later this month, the nation will pass two other important statistical bench marks. At midmonth, the gross national product will top the $800 billion level; the $1 trillion mark is certain to be reached in the early 1970s. And on Nov. 20, at precisely 11 a.m., the Census Bureau's population clock, which records an additional American every 141 seconds, will register 200 million.

The three milestones have profound implications for the future course and quality of American life--and of America's relations with the rest of the world.

A nation that, with 6% of the world's population, can outproduce all the Communist countries combined and account for more than 42% of the entire output of the non-Communist world, is bound to be envied, feared and often hated. But it is also bound to be emulated, particularly when its performance is compared with that of the world's other superpower. With 30 million more people than there are in the U.S., the Soviet Union (see cover story) has a G.N.P. that is less than half as large as America's.

Cyclical Roller Coaster. The 80-month U.S. boom reflects a climate of growth, but also stability. A notable measure of that stability was the willingness of the Ford Motor Co. last month to guarantee up to 95% of the annual wages of workers in what has historically been an unstable, layoff-prone industry. Since 1834, the U.S. economy has ridden the cyclical roller coaster through 31 booms and busts. Nobody is willing to predict that cyclical peaks and troughs can entirely be eliminated. But many economists are convinced that with prudent and prompt cooperation between business and Government, business and labor, and President and Congress--lately, a big if--they can be flattened out considerably.

Since the expansion began in

February 1961, the G.N.P. has increased by a staggering $285 billion (more than the combined 1966 production of France, West Germany and Italy). 9,000,000 new jobs have been created, consumer income has risen 40% and consumer spending 46%.

But the boom has not been a one way ride on the gravy train for everybody. An increasing amount of time is being lost in strikes--most recently in the auto, steel-hauling and copper industries. Unemployment is down to 4.1%, from 7% at the beginning of the upsurge, but it has risen in the past year. On Wall Street, the stock market took a toboggan ride last week, with the Dow-Jones industrial average plummeting 31.56 points to a five-month low of 856.62. Though price increases had been held to 1.3% a year for nearly five years, they have averaged more than 3% for the past two years and inflation is once more a real threat. If, as seems probable, the 7% settlement at Ford sets a pattern for other industries, that threat will be heightened.

Faster than Ever. It remains to be seen whether the Administration can make political capital out of the record expansion. Americans may be making more money than ever, but a recent Gallup poll showed that 60% of them still regarded finances as their most urgent problem; thanks in part to medicare, illness was second, noted by only 8%. A Christian Science Monitor survey of the Governors said that they "see the housewife's economic anxieties (and her husband's, too) as overshadowing either Viet Nam or crime in the cities as the issue most likely to be felt at the polls." The game is still keeping up with the neighbors, but the neighbors seem to be running faster than ever.

Inflation could rob Johnson of the potentially powerful pocketbook issue. G.O.P. orators are already putting emphasis on the phrase "profitless prosperity." Though the President may be tempted to campaign on the theme of "You never had it so good," it is doubtful that U.S. voters will give him all the credit. "They think that they had something to do with it, too," says a Democratic strategist. Johnson contends that his proposed 10% surcharge on personal and corporate income taxes would help avert inflation, but he is having little luck in persuading Congress. Unless the surcharge is enacted, he warns, in a particularly infelicitous phrase that he has been using frequently, most Americans will wind up paying an "inaction inflation tax." Example: a family with a $10,000 income would pay an additional $110 or so in taxes with the Johnson surcharge, but it would pay $285 more next year if the surcharge is not enacted and prices continue to rise at their present rate.

No Poor-Mouthing. The darkest side of the boom is the persistence of poverty. Thirty million Americans still live on poverty-level incomes ($3,000 a year or less for a family). The aged, the nonwhite and the small farm worker are particularly hard hit. In some Negro ghettos, 28% are unemployed--a higher rate than the U.S. as a whole experienced in the depths of the Depression. In addition, problems of air and water pollution, classroom shortages, inadequate mass transportation and urban decay plague the nation.

The resources are available to cope with the problems--Viet Nam notwithstanding. "This country is doing extremely well financially," said Health, Education and Welfare Secretary John

Gardner last week. "To poor-mouth, to say that we can't afford to make our cities livable, is just shocking to me."

Indeed, the nation has taken huge strides forward since the '30s. Franklin Roosevelt's "one-third of a nation" is now closer to one-seventh of a nation; many who are considered "ill-housed, ill-clad and ill-nourished" by today's standards would not have been considered too badly off a generation ago. According to a Government report released by the President last week, the number of Negro families earning less than $3,000 has been halved, to 32%, in the past two decades, and fully 45% earn over $5,000 a year.

The trouble is that though progress is being made, the pace seems glacial to those who need help. As Columbia University Sociologist Daniel Bell points out: "A desire for instant form or instant solutions is deeply ingrained in the American temper, both on the left and the right. The left wants, for example, an immediate end to poverty; the right an immediate victory in Viet Nam." As a result, both are vociferously--and at times quite violently --unhappy.

Within Reach. The population problem may well be of even greater significance to the future of the U.S. than poverty. It took the country nearly three centuries to reach the 100 million mark in 1915, and barely half a century to add the second 100 million.* The population could soar to 300 million as early as 1990, and some demographers see the possibility of half a billion Americans within 50 years. But they have been wrong in the past. In the 1930s, they predicted a decline in U.S. population; in the 1950s, they were talking about a population of 400 million before the end of the century. In the first case, their estimate was proved wrong by the baby boom that followed World War II; in the second, by the pill, the ever-increasing affluence and urbanization of the nation, and the forbidding cost of raising and educating even one or two children. If population growth is slowed and then stabilized, as Duke University Economist Joseph J. Spengler has noted, "the economy will really become opulent, and much of the population affluent."

Affluence for all does indeed seem within reach, despite the difficulty of rooting out the nation's poverty pockets As usual, it was De Tocqueville who put it best. In the U.S., he predicted more than a century ago, what the few have today, the many will demand tomorrow. What he could not have foreseen was that so many would get so much so soon.

* As it grew, the population moved steadiry west According to the 1940 census, the center of U S population was on the Indiana side of the Wabash River. By 1950, it had shifted to eastern Illinois. The admission of Hawaii and Alaska, plus the rush to California, helped move it to a point just outside Centralia, 111., about 55 miles east of the Mississippi River, by the 1960 census. Today the center is probably on the western shore of the Mis sissippi for the first time.

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