Robert Eisner is William R. Kenan Professor of Economics, Emeritus, at Northwestern University. His latest book is The Great Deficit Scares: The Federal Budget, Trade and Social Security. A new work, Social Security: More, Not Less, will be published by the Twentieth Century Fund in 1998.
We mustn't have it too good. Too much growth too little unemployment is a bad thing. These are not the idle thoughts of economic nail-biters; they are the economic policy of the United States. After real growth of gross domestic product (GDP) hit 4.5 percent in the last quarter of 1994 and unemployment dipped to 5.4 percent in December, the Federal Reserve moved on February 1 to raise interest rates for the seventh time in less than a year. Why? To slow our too rapid rate of growth and stop or reverse the fall in unemployment. Why do that? To fight inflation.