Whatever deficit-reduction bill is passed this week, the frantic and disappointing activity in Washington in July gives strong evidence that the United States is committed to enlarging its national debt by at least $1 trillion during each presidential administration.

What does that mean for the bond market, and for you and me?

Any country that really wanted to reduce the deficit would raise gasoline taxes more than a few pennies a gallon, would confront entitlements head on, would charge market prices for publicly owned timber and range, would end unneeded military programs, would raise the corporate tax rate, and so on. But so many people have fought these proposals that the deficit will not be reduced very much.

Last Friday it seemed the deficit reduction, if any, would be less than the $500 billion that the White House had proposed. If the plan was to be enacted, it would be by the narrowest of margins.

Albert M. Wojnilower, senior adviser to the First Boston Investment Management Group and a canny observer of the credit markets for 40 years, says the furor won't make the slightest difference. He is neither pessimistic nor optimistic about the economy, but he says none of the important forces now at work "will be modified in the slightest by any plausible change in American fiscal policy - at least not for the better. "

Businesses and consumers are less optimistic, Wojnilower says, and their less buoyant attitudes reflect "the tardy recognition that trying to balance the budget in a sluggish economy is an unhappy and self-defeating exercise. Whether spending is cut or taxes raised, the total impact on the public's pockets is the same; it's only a question of whose pocket is to be emptier."

Even if Congress enacted the most aggressive deficit reduction plan being debated, it will be only a few months before the country must confront federal budget deficits for 1995 and the savings and loan bailout. Deficits will be just as large as before, Wojnilower said, calling the budget process "a treadmill to nowhere."

If that's so - and Washington's behavior in July certainly supports this description - what's an investor to do?

Wojnilower is rather nonchalant about the next few years, and he indicates that about the only thing you can do is become more venturesome to improve your rate of return. With short-term interest rates, adjusted for inflation, already below zero, savers inexorably are "drawn to higher-risk assets," he said. In other words, stocks and long-term bonds.

Eventually the economy will heat up, and short-term interest rates will rise substantially and the securities markets will crash. But it probably doesn't make sense to worry about this for a few years yet, Wojnilower said. Which is a comforting thought after the lack of businesslike accomplishment on Capitol Hill last week.

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