Miller Sees Shallower, Shorter Recession: Miller Sees Military Spending Easing Recession
International tensions and stepped-up military spending may make the expected 1980 recession ÛÏa little shallower and a little shorter,Û Treasury Secretary G. William Miller believes.</br></br>In an interview late this week. Miller also indicated that the new expansionary thrust for the economy caused by the renewal of cold war with the Soviet Union makes a tax cut ,k ÛÏin these uncertain timesÛ even less *	ÛÏWeÛªve got to err on the side of å¤ making sure weÛªve got austerity es-> tablished before we start giving out \ the dividends of a fiscal package | which has yet to deliver the surplus,Û ; Miller said.</br></br>I The prospect for a less severe reces-| sion, Miller said, reflected his per-I sonal opinion that the economy is</br></br>likely to be spurred by a psychological pickup. He said that next weekÛªs budget for fiscal 1981 would have to be based on classic economics: The underlying economic assumption predicts a moderate recession through the first half of 1980, with a second-half recovery. But he said the outlook had been changed by the ÛÏdisturbances in the Middle EastÛ which could escalate further. As a result, he said, the Pentagon could be expected to ÛÏaccelerate their own purchasing to have themselves better prepared,Û creating an earlier impact on the economy whether or not total defense spending is pushed beyond the 5 percent real growth already planned.</br></br>Similarly, he said it was his opinion that both businessmen and consumers would react to the potentially explosive world situation by making invest-