Assessing the Reagan administration's economic policy, Manatt asserts that it cannot be effective in the current, troubled financial market. The major cause of the trouble, he says, is the low level of saving and investment in the United States. Manatt criticizes Reagan's plan to increase defense spending, which he says will fuel inflation. He argues that the proposed income tax cut would only help the wealthy. Finally, Manatt predicts that Americans will be forced farther into poverty if the administration refuses to increase incentives for new saving and investment, which Manatt asserts would boost productivity.