Candidates offer voters economic options

When it comes to economics, Americans will likely have a clear-cut choice in this November's presidential election. As measured by economists here and throughout the US, there are sharp differences in the way that Republican front-runners Ronald Reagan and George Bush would administer the giant US economy, as compared with President Carter.

With the exception of Illinois Rep. John B. Anderson (given little chance of wresting the nomination), the other GOP candidates are not considered to differ drastically from candidates Reagan or Bush. That also includes former President Ford.

Although Mr. Carter and Mr. Bush and Mr. Reagan often sound similar when discussing policy -- for example, when talking about "reducing the size of government" -- in fact, the candidates have deep ideological differences about economic policy, as well as the style and tone of administering that policy.

Ironically, however, economists say that even if a Republican candidate were to be elected, a real change in the direction of US economic policy would not be seen until 1982 or 1983.

The reason is that the incoming president -- assuming a Republican were elected in November -- would be faced with a first-year budget set by his Democratic predecessor. That means that if voters wish a major or drastic reorientation of economic policy at this time, that change will not really come for another two to three years.

President Carter's policies have "been very stimulative," says Ben E. Laden, chief economist of T. Rowe Price Associates Inc. in Baltimore.

"The President," argues Mr. Laden, has continued to use "conservative-sounding rhetoric" and tell us that the fight against inflation has a high priority with his administration. But "in fact," he notes, the evidence seems clear that "the focus" of administration concern throughout Mr. Carter's first term has been unemployment. For that reason, he maintains, Carter economic policy is very close to "traditional liberal Democratic policy."

Current GOP front-runner and former two-term California governor Ronald Reagan, says Arthur Gandolfi, and economist with Citibank in New York, goes beyond the "hnormal conservative Republican emphasis on protecting the private sector and incentives."

Mr. Reagan, he says, is the only GOP candidate who is stressing a reduction in the money supply. This attention to "monetary policy," says Mr. Gandolfi, himself a monetarist, is "unique among candidates."

Looking at specific positions of the candidates brings the differences into sharp relief:

Fiscal policy: All three candidates -- Carter, Reagan, and Bush -- talk about balancing the budget. Mr. Bush, however, favors legislative restrictions mandating a balanced budget. He would also hold the increase in federal spending to no more than 7 percent annually.

Mr. Reagan puts his main emphasis on not just reducing fedeal expenditures, but also slowing the growth of the money supply. He is believed to be very sympathetic of the views of economist Milton Friedman.

Tax policy: The Carter administration is against a tax cut now, but might consider it later if the US slides into recession; it also talks about "tax reform."

Mr. Bush calls for a $20 billion tax cut, split between business and industry; he favors "tax indexing" to prevent inflation from boosting the tax burden.

Mr. Reagan has favored the Kemp-Roth approach for a hefty 30 percent or so tax cut spread over a three-year period. He wants to end inheritance taxes and double taxation of corporate profits and dividends.

Health care: Mr. Carter favors hospital cost containment and phased-in national health insurance. Candidates Bush and Reagan are against national health insurance, although Mr. Bush favors catastrophic health insurance.

Unemployment policy: Mr. Carter favors large-scale public service jobs as well as federal incentives to industry to train and hire hard-core unemployed. Candidates Bush and Reagan lean toward tax credits to industry for hiring, and lean against large-scale public service programs.