4—The Daily Collegian Thursday, July 26, 1989 Fed reserve won't tighten money supply until 1985 By MARTIN CRUTSINGER Associated Press Writer Federal Reserve Chairman Paul Volcker served notice yesterday that the central bank won't tighten its grip on the money supply until 1985, and then only slightly a decision likely to curb the surge in interest rates. But Volcker warned again that looming federal budget deficits threaten a "relapse into inflationary economic malaise." Analysts said that since financial markets had feared more tightening by the Fed, interest rates would likely stabilize or decline slightly over the next few months. Following Volcker's announce ment, the dollar, which has been soaring to record heights against other major currencies, declined somewhat, reflecting the belief that U.S. interest rates aren't in for con tinued increases. Bonds and stocks rallied, with the Dow closing up 10.38 points after hitting a 17-month low a day earlier. As part of its mid-year assessment of economic trends, the central bank predicted economic growth would turn sharply lower next year while inflation which has been lower than expected would pick up. Volcker, lobbying for further action on budget deficits, said the choice was between "sustained growth in a framework of greater stability or a relapse into inflationary economic malaise." "The hard fact is, as I am sure the Congress is fully aware, the deficit remains huge ... and absent further action little or no further decline now seems probable for 1985 and beyond, even assuming the economy contin ues to move to full employment lev els," Volcker said in testimony before the Senate Banking Committee. Write a letter W \ to a friend! The Treasury reported yesterday that the government outspent its rev enues by $2 billion in June, a sizable shrinkage from the red ink of the previous month which was a re cord $33.9 billion. That brought the deficit for the nine months of the fiscal year to $142.2 billion. Volcker's comment contrasted with the assertion of President Reagan Tuesday night that the recovery would provide strong revenue gains to help whittle down the deficits. Reagan said he had "no plans" to seek tax increases next year, pre ferring to rely on further budget cuts to reduce the deficit. Volcker said that normally deficits would fall as recovery took hold but "that is not happening at this time." He said the U.S. Treasury must com pete with accelerated demands for consumer and business borrowing, thus driving up interest rates. Volcker said the high interest rates were attracting a massive flow of foreign investment into this country. He raised concerns, as he has pre viously, about the country's growing dependence on foreign capital to fi nance the budget deficit, questioning how long it could be sustained and at what price to the country's exporters who have seen overseas sales plummet because of thp strong dol lar. Critics have charged that it was a tight-money policy on the part of the Fed that was driving up interest rates, but Volcker said he saw no signs that "the economy has been starved for money and credit." He said the central bank was hold big to its current targets for mone tary growth for the rest of the year and planned to tighten just a bit next year. David Wyss, chief financial econo mist at Data Resources Inc., said the new targets showed "an overall pat tern of gradual tightening of policy, but not as tight as had been ex pected." He predicted "stable to slightly downward interest rates" over the coming months. Kathleen Cooper, economist at Se curity Pacific National Bank in Los Angeles, agreed that interest rates should stabilize briefly on the Fed announcement, but she said there would be renewed pressure on the central bank for higher rates later in the year as the economy continues to grow. Meanwhile, an interest-sensitive sector of the economy showed a de cline in June. The National Associa tion of Realtors said resales of single family homes fell to a seasonally adjusted 2.99 million still 6 percent ahead of June a year ago, but the first time since February the annual rate has fallen below 3 million. For its part, the central bank fore cast continued economic growth this year but predicted the growth rate could be cut in half next year. It said the gross national product, after adjusting for inflation, would rise by 6.25 percent to 6.75 percent this year, dropping to between 3 and 3.25 percent in 1985. Inflation, the Fed predicted, would rise from about 4 percent this year to perhaps 5.5 percent next year. Even with the economic slowdown, the Fed predicted unemployment would hold steady, averaging between 6.5 per cent and 7 percent at the end of next year. Unemployment in June fell to 7.1 percent of the civilian labor force. For the monetary targets, the Fed said it planned to keep growth in the weekly measure of the money supply in a range of 4 percent to 7 percent next year. That measure, technically called Ml, consists of cash and check ing accounts. It's time. You drank all the beer, saw all the home games, missed all the first periods, and now, it's time. It's time to think about commencement. It's time to look for a job. It's time to have your résumé done by Collegian Production. At Collegian Production, we can give your tired old typewritten résumé a new life. We'll set it in type and if you'd like, have it printed. We also have matching letterheads and envelopes to complement your résumé. Stop by and look at our sample book. You'll have a choice of several formats and fine quality papers. All you have to do is tell us what you want your résumé to say: Isn't it time you made your own statement? collegian production Résumé Service 126 Carnegie Building Monday through Friday 8:30 a.m. to 4:30 p.m. or by appointment (814) 863-3215 Soviet woman walks in space By The Associated Press MOSCOW Soviet cosmonaut Svetlana Savitskaya left her orbit ing Salyut 7 space station yester day and became the first woman to walk in space, Tass reported. The official news agency said she was joined on the space walk by cosmonaut Vladimir Dzhanibekov, and they "went into open space . . . in accordance with the flight pro gram" for more than three hours. Savitskaya, Dzhanibekov and Igor Volk blasted into space last week aboard a Soyuz T-12 space ship. They joined three other cos monauts, Leonid Kizim, Vladimir Solovyev and Oleg Atkov, who have been aboard the orbital research 'station for 167 days as of yesterday. Savitskaya is making her second space voyage, the only woman to do so. She spent nine days aboard the Salyut 7 in August 1982. Tass said the two cosmonauts began the walk at 6:55 p.m. Mos cow time (10:55 a.m. EDT) and returned safely to the obiting cap sule 3 hours and 35 minutes later, "after the successful accomplish ment of the planned work. . ." The report on the Tass English language service said: "the main aim of the walk in open space was to test the new general purpose, hand-operated tool deisgned to car ry out complex technological oper ations. The woman cosmonaut took an active part in this work. "The cosmonauts installed in the airlock and prepared for operation a portable electron beam plant, a control panel, a current converter and master boards with metal samples," Tass continued. "Using the general purpose hand tool, Svetlana Savitskaya carried out in successive operations of cut ting, welding and soldering on met al plates and spraying of coating. Meanwhile, Vladimir Dzhanibekov `Using •the general purpose hand tool, Svetlana Savitskaya carried out in successive operations of cutting, welding and soldering on metal plates and spraying of coating. Meanwhile, Vladimir Dzhanibekov carried out (movie) photography.' carried out (movie) photography." "Svetlana Savitskaya again ap "After the completion of the Pears on the screen. This time she work, the equipment and the sam- is using another hand-operated pies obtained were returned to the tool. By means of it she is carrying (station's) airlock." out an experiment connected with A Tass correspondent wrote that the deposition of one material upon he watched Savitskaya "hover" in another by spraying, that of silver space "on the huge screen of the upon aluminum, in this case. .. . ~ main hall of the (mission control) ... Eitra-terrestrial re center." , searches are conducted in two He said the hand-operated tool stages. When the orbital complex she used weighs more than 66 enters the earth's shadow, the cos pounds on earth but is weightless in monauts have a rest. This takes , space. approximately 40 minutes. Then an "However, it is not easy to work experiment is continued in the con with it (the tool)," the Tass report- ditions of solar lighting er wrote. "The space suit is not elastic enough and for each movement, a person expends much more energy than when back on Earth. Within several hours of Working in the space suit, a cosmo naut loses up to three kilograms (6.6 pounds) in weight." The Tass reporter gave this de scription of the work. "Svetlana Savitskaya is holding an instrument resembling a cam era with several lenses. She presses a console button and an electron beam cuts one of the metal specimens positioned on a special • board. A movement of the hand, and the cosmonaut changes the board, pressing another button. A new experiment follows. An invisi ble beam softly welds two metal plates into one. . . . Svetlana Savitskaya ..,~ ... ~~i/ .~ Want to sell Penn State? Tell Penn State! Advertise in d Collegian —Tass English-language service AP Laserphoto briefs Teachers' certifications questioned HARRISBURG (AP) Auditor Gen eral Al Benedict said yesterday that the state Education Department can not verify the certification of nearly 17,000 Pennsylvania teachers. An Education Department spokeswoman, however, said "that is Court overturns milk marketing rule 'HARRISBURG (AP) Common- ative had filed a claim for $576,507 in ers in March 1983. Full payments wealth Court yesterday overturned a unpaid bills after the Sun Re Cheese couldn't be made because the claims state Milk Marketing Board ruling Corp. defaulted in November 1982. totaled $1.6 million, exceeding the and decided a large farmers cooper- Within the next month, two other milk size of the security fund. ative was entitled to more money in dealers, Shadowbrook Farms Inc. As a result, Eastern was paid $264,- default payments. and Damon Dairy Processing, also 033, or 45.8 percent of its claim. The The court found problems with the defaulted on payments to farmers. cooperative appealed to Common way the milk board distributed $734,- The milk board took the claims wealth, Court, which said yesterday 157 from a security fund in early 1983. pending against all three dealers and that it was entitled to 75 percent of its Eastern Milk Producers Cooper- certified reduced payments to farm- claim, as called for in state law. Prison allowed to force-feed inmate BOSTON (AP) A prison inmate ,who stopped eating 42 days ago to protest alleged brutality by guards can be force-fed, if necessary, pen ding trial next month on his right to fast, a state judge ruled yesterday. Appeals Court Judge Donald R. Grant issued the ruling after a 30- minute hearing. At the hearing, De partment of Corrections attorneys submitted an affidavit from a doctor who said inmate James E. Martin could die or seriously harm himself if his hunger strike continues until the Aug. 13 trial. Lawyers to WASHINGTON (AP)• The Senate voted 96-1 yesterday to allow the federal government hire lawyers spe cializing in debt collection to sue "deadbeats" who owe the govern ment $4O billion in student and farm loans and other debt. Sen. Howell Heflin, D-Ala. cast the only "no" vote. Arguing that U.S. attorneys are too busy fighting violent crime and com batting drug sales to pursue debtors, Sen. Alfonse M. D'Amato, R-N.Y., said it was time to call in the pros. "U.S. attorneys are crime fighters not bill collectors," he said. "Re calcitrant debtors know that their refusal to pay their debts is unlikely to result in any legal action against them." The government is already autho rized to use private debt collectors but they can't take the final step in the process litigation. Poles defect to Sweden for asylum STOCKHOLM, Sweden (AP) Seven was escorted by two Swedish air aboard the plane requested political Polish defectors in an antiquated force fighters when it entered Swed- asylum and were taken to police biplane flew to Sweden last night and ish air space. A navy helicopter was headquarters in the southern town of requested political asylum, authori- also on hand to assist should the plane Kristianstad. ties reported. run out of fuel, the officials said. A similar Antonov An-7 biplane was The Soviet-built crop-dusting plane The four adults, and three children used in a previous Polish escape. Cuba marks 25 years under Castro CIENFUEGOS, Cuba (AP) Cubans detailing the abuses of Cuba's right- from Havana. Other buses brought streamed into this south-coast city wing dictator, Fulgencio Batista. peasants from outlying provinces to yesterday in preparation for the Corn- Castro was exiled to Mexico, but this city of 100,000, traditionally munist nation's major revolutionary returned in 1956 to begin a "26th of called the "Pearl of the South" by holiday. July Movement" guerrilla war that Cubans because of its attractive bay Banners, posters, and tiny Cuban ousted Batista in January 1959. and glittering beaches. flags emblazoned "25-26" hung from The holiday is the most festive in The city has become better known the houses here the eve of the 26th of Communist Cuba, which no longer to U.S. Pentagon officials as the site July holiday. This year is the 25th observes Christian holidays such as of the major Soviet-built military year of Fidel Castro's rule on the Christmas. It comes at the height of installation on the island. A Soviet island just 90 miles off the Florida the week-long Carnival of parades, Cuban naval base here includes sub keys. . floats and all-night street dancing. marines. Castro, then a 26-year-old lawyer, The traditional pre-Lent carnival A nuclear power plant now is under led a July 26, 1953 attack on the army was shifted to July three decades ago construction in Cienfuegos. barracks at Moncada in eastern because most Cubans are on vacation Castro, who indicated last month Cuba. Most of his 130 men were killed at this time of the year. during a visit by the Rev. Jesse or, like Castro, taken prisoner. At his Yesterday, a bus convoy brought Jackson that he would like to normal trial, Castro delivered a prophetic Communist Party activists, Cuban ize relations with the United States, "history will absolve me" speech . and foreign journalists and diplomats will speak at today's celebration. Buildings being stolen brick by brick ST. LOUIS (AP) The price of brick cent of the vacant buildings in the new building construction in the met has doubled since spring and enter- city, wants the Board of Aldermen to ropolitan area. prising thieves are taking sledgeham- stiffen the penalties against brick "All this is tied to the health of the mers to vacant buildings, prompting theft to an automatic $l,OOO fine and a housing market," he said. "In 1980 city officials to propose stricter pe- five-year jail term for persistent of- and 1981, you could practically give nalties against brick rustling. fenders. (brick) away." "Brick theft has always been with "I would estimate five to 10 build- Three men were arrested by police us," said Richmond Coburn, exec- ings are stolen a week," he said as they were removing bricks from a utive director of the St. Louis Land Monday. "Good used brick is going vacant 70-year-old building on the Reutilization Authority. "But it's for about $lOO a pallet in St. Louis." city's north side July 19. been really bad only since March or Each pallet holds 500 bricks. "The problem lies with the people April. That's when the price of brick Coburn attributed the recent jump who buy the brick," Coburn said. doubled." in brick thefts to increases in the "They're not distinguishing between Coburn, whose agency owns 30 per- number of rehabilitation projects and the illegal and legal sellers." Treasury investigation heats up HARRISBURG ( AP) State Trea- for 75 Minutes. Outside, he would only "ludicrous, defamatory, preposter surer R. Budd Dwyer appeared for say that he was to testify before the ous, asinine and the worst example of 4 1 / 2 hours before a federal grand jury grand jury. election year politics I have ever here yesterday to answer questions The grand jury is looking into the witnessed." about a no-bid contract his depart- contract, which called for Computer Bepedict, whose own department ment awarded a California firm. Technology Associates of Newport has been sullied by a job-selling scan " The U.S. attorney has asked me Beach to recoup Social Security taxes dal, is running against Dwyer in not to comment," Dwyer said after a that Pennsylvania school districts November for state treasurer. morning session ended. He said he mistakenly deducted from their em answered all questions put to him. ' ployees. Meanwhile, a tape made available by the auditor general's department "My department and I are trying to Janice Kincaid, who resigned in indicated that California-based CTA be helpful in this matter," he said. May from the company, has given a hired women employees to "do what Dwyer said he felt "drained" after sworn statement to Auditor General ever they're needed to do" for the the grand jury appearance, accord- Al Benedict's staff claiming a $3OO,- ing to Treasury Department spokes- 000 kickback to Dwyer's campaign company. man Greg Penny. was promised and another state offi- In the taped interview, Kincaid, 42, John Wellington, the Treasury De- cial was promised $lOO,OOO to win the described her own role with CTA as partment's chief counsel, followed contract. "to do anything I needed to do to Dwyer and was before the grand jury Dwyer has branded the allegations make our customers happy." absolutely not true." Benedict said an Education Depart ment memo dated May 23 shows that the certification of 16 percent of the state's 103,055 teachers cannot be verified. But •Education Department An affidavit from a physician hired partment spokesman Joseph Landolfi by Martin's attorneys disputed that said the prisoner submitted to the diagnosis. Attorney John Osler said feeding voluntarily. Martin "does not want to die, hasn't The other inmates have ended their said he wants to die and doesn't plan fast to do so. "All he's asked for is to make his own decision," Osler said. Martin, 26, has been fed intrave nously twice since he and about 11 inmates housed in the high-security Block 10 of Walpole State Prison began fasting June 14, according to another court-appointed attorney, Anne Greenblatt. Corrections De- sue debt 'deadbeats' "How can this be when everyone is require the work to be spread around talking about balancing the budget?" among a number of firms in an area, asked Sen. Howard M. Metzenbaum, when possible. D-Ohio. The amendments passed 95-1, with He said a debtor, "who has been a Sen. Barry Goldwater, R-Ariz. cast deadbeat to begin with," is likely to ing the only negative vote. be slow in paying if he knows he'll Hearings were held on a similar bill never be hauled into court. in the House at almost the same hour He proposed amendments to make as the Senate vote. sure that "this does not become the told those hearings "the lawyers' enrichment bill." The taxpayers of this nation are geing amendments requires that law firms robbed by those who would borrow bid on the contracts and that contin- money and then skip out on their gency fees, where the lawyers get a responsibility to repay." percentage of everything they col lect, be limited to usuaul rates in each The legislation is another part in community. the stepped-up pressure being put on Metzenbaum quoted from a collec- thoe who don't pay the federal gov tion firm's leaflet which said collec- ernment. tion lawyeriusually get 13 percent in The government is now sending cases of $2,000 or more up to 20 more frequent dunning letters, comb percent when they collect debts of ing tax records to find deadbeats, and less than $3OO. recently the goyernment started re ; The Metzenbaum amendments also porting debtors to credit bureaus.. spokeswoman Ann Witmer said the "poorly worded" memo refers to the teachers who received certificates before 1968. The memo advocated adding the pre-1968 certification records to the computer files, Witmer said. By Tuesday night, Martin's weight had dropped from 160 pounds to 121 pounds, Greenblatt said, adding that he has continued to take liquids and appears to be in good condition with "his memory and judgment intact." Martin, who has been moved to the hospital unit of the state prison at Norfolk, was not in court yesterday. verythin: Is On Sale At -4(/ 011 4- -te rr rc c ss 111 r bro 7` if IC. ft l o Sf i ll) Gig . k eis 1 ga, w sz o- • (I) t ie 11 l Ili ENTIRE THE ENTIRE STORE IS ON SALE! COME INTO WILSONS AND TAKE 15% OFF WHATEVER YOU BUY! EVEN ITEMS ALREADY ON SALE * SHOP FOR FALL AND BACK - TO - SCHOOL FASHIONS, CASUAL WEAR, CAMPING SUPPLIES AND LOTS MORE! ••.„. , . • . . ••• -• • • •• ••• •• • • • . . . The Daily Collegian Thursday, July 26, 1984-5 STOCK
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