VOLCKER SEES TIGHT POLICY HURTING INVESTMENT

  Federal Reserve Board Chairman Paul
  Volcker said a restrictive monetary policy would be damaging to
  investment and that a better course would be to restrain
  spending.
      "A restrictive monetary policy would hit investment. You
  don't want to put interest rates up unless you have to," Volcker
  told the Senate Banking Committee.
      "That is not a constructive way to proceed," he said.
      Volcker said that given a choice between squeezing the
  budget deficit or squeezing investment, he would favor
  squeezing the budget deficit.
      In response to a question about banks, Volcker said he
  would be pleased if Congress decided to give banks a tax
  writeoff as an incentive for them to take greater reserves
  against loans to debtor countries.
      "If you give a tax writeoff for reserving against loans,
  then we will see more reserving and that would make me happy,"
  Volcker told Committee Chairman Sen William Proxmire (D-Wisc).
  

