The Week

Karpov beat Korchnoi, the Soviet media went wild, and in the frenzy of the moment Leonid Brezhnev said the victor had displayed “genuinely Soviet character.” Most experts, however, felt Karpov had won honestly.

Remember when critics of the Reagan budget said that it would be dangerously inflationary? Not only was its fiscal policy way too stimulative, they said, but there was an awful boost in defense spending, and a dollar spent on defense was ever so much more inflationary than a dollar spent on anything else. Well, that line of analysis has just been roundly rejected by none other than Alice Rivlin, the prominent liberal economist who heads the Congressional Budget Office. Testifying before the Joint Economic Committee, Mrs. Rivlin explained why her office expects inflation to drop year by year under Reagan budgets: the increase in defense spending will not be inflationary; it will not cause bottlenecks in industrial production, there being plenty of slack in the system; and, “by our calculations, the overall fiscal policy proposed by the Administration is not extremely expansionary.”

Karpov beat Korchnoi, the Soviet media went wild, and in the frenzy of the moment Leonid Brezhnev said the victor had displayed “genuinely Soviet character.” Most experts, however, felt Karpov had won honestly.

Remember when critics of the Reagan budget said that it would be dangerously inflationary? Not only was its fiscal policy way too stimulative, they said, but there was an awful boost in defense spending, and a dollar spent on defense was ever so much more inflationary than a dollar spent on anything else. Well, that line of analysis has just been roundly rejected by none other than Alice Rivlin, the prominent liberal economist who heads the Congressional Budget Office. Testifying before the Joint Economic Committee, Mrs. Rivlin explained why her office expects inflation to drop year by year under Reagan budgets: the increase in defense spending will not be inflationary; it will not cause bottlenecks in industrial production, there being plenty of slack in the system; and, “by our calculations, the overall fiscal policy proposed by the Administration is not extremely expansionary.”