Documents / FOIA release
This Top Secret study by the Interdepartmental Coordinating Group on Germany and Berlin, dated July 12, 1961, and released by the Central Intelligence Agency, answers NSC Directive No. 58 of June 30, 1961. It sets out courses of action for the Berlin crisis but does not judge their merits. It covers imminent presidential decisions, a three-phase timetable running to January 1, military preparations and mobilization, covert action, economic sanctions, public information, negotiating positions and checkpoint procedures for East German personnel.
“Cooper”8 pages
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## Appendix A supplementary expenditure in fiscal 1962 and $7.5 billion ($15 billion annual rate) in the first half of fiscal 1963. The assumed quarterly patterns of added defense outlays are given below (in billions of dollars at annual rates): Calendar Year Quarter 1961 1962 III IV I II III IV Low assumption 2 6 6 6 6 6 High assumption 4 12 15 15 15 15 These hypothetical increments can be linked to present projections of GNP based on the current budget outlook. With existing plans for Federal spending, GNP in real terms is expected to rise at an annual rate of 6 percent for the next six quarters, according to projections prepared jointly by the Bureau of the Budget, Council of Economic Advisors, and the Treasury Department. Since potential GNP rises at an estimated annual rate of 3.5 percent, the gap between potential and actual output is expected to narrow but to remain substantial through 1962. Unemployment is expected to remain at levels above 5 percent of the labor force, in contrast with the "full-employment" target of 4 percent. Potential GNP and current projections of actual GNP are shown in the first two lines of Table 1. These data are expressed in prices of the second quarter of 1961. By raising private incomes, added military outlays would expand the demand for consumer and investment goods. If firms and households respond in a normal fashion to the expansion of their incomes, each extra dollar of defense spending would eventually increase GNP by a total of about two and a half dollars. Estimates of GNP in constant prices are shown in Table 1 for the low and high assumptions concerning incremental defense outlays. With the low estimate of extra military spending, GNP for calendar 1962 is projected at $561 billion (in constant prices) in contrast with the $546 billion estimate based on the current budgetary outlook. Even with the increased $15 billion of output, projected GNP remains below potential through 1962. Unemployment would probably get below 5 percent of the labor force in the second half of 1962, but it would be expected to remain above 4 percent. Furthermore, the largest prospective quarterly increase in output--3 percent in the last quarter of 1961-- could be
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FOIA release, from the cia-readingroom collection. The PDF is mirrored here; the original link is above. The text was read from the page images by GLM-OCR; expect the odd misread word. 163 pages are in the text index: search them above, or from the library's search.