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Policy Change Needed to Halt Rising Deficits

February 10, 1985

Economic commentators lately have done little to sort out fact from fiction in President Reagan's rhetoric about past and present deficits and the gross federal debt.

The magnitude of deficits and debts has meaning only as a proportion of the gross national product--the capacity of our society and government to handle indebtedness. And in fact, in the first 35 years after World War II, the debt was fluctuating downward as a percent of the GNP. But during the Reagan Administration, the situation became qualitatively different.

In 1945 (due primarily to the war effort), the gross federal debt was a whopping 119.9% of the GNP! By 1950, the debt was down--but only to 96.9% of the GNP. However, in fiscal year ending Sept. 30, 1981, for example, the debt was already down to 35% of the GNP.

Then in the fiscal years 1982, 1983 and 1984, the debt rose to $1,147 billion, $1,381.9 billion and $1,576.7 billion respectively. This was a tremendous leap upward to 44% of the GNP--an increase of 9 percentage points in three years--drastically reversing the post World War II trend.

For decades, debt reduction as a percent of the GNP was possible even when the debt grew in absolute terms, because deficits were reined-in under every administration to one degree or another, so that the economy expanded at a faster rate than the debt increased.

But now there is a crisis. Even best-case projections indicate that the debt will become worse. Blaming it on "history" and proposing balanced-budget amendments to the Constitution are simply hypocritical. A change in Administration policy, either by its own belated decision or imposed by Congress, is necessary.

MAX MONT Los Angeles Missed the Issue on Ticketmaster

I understand the compromises necessitated by "personality journalism," but when it is presented at the expense of consumer protection, certainly The Times, at least, should draw the line.

Buried in the last column of "Ticketmaster Emerging as Force in L.A." (Jan. 31) is the fact that the success of Ticketmaster's Fred Rosen is based on the higher service charges he assigns to the consumer.

His ballyhooed "Business 101" formula is not a sweat-and-smarts formula as presented, but rather a plain and simple plan with his new accounts to pass former costs on to the public.

This is the issue, and The Times missed it.

SCOTT E. McCREARY Glendale Letters to the Business Editor should be as brief as possible and are subject to condensation.

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