As the article ``Despite new funds, Rio is unprepared for annual summer floods,'' Dec. 15, suggests, the annual summer rains and floods that devastated 470 shantytowns in Rio de Janeiro are a serious problem. It is laudable that the Brazilian government and the World Bank are making loans of millions of dollars to try to shore up the hillsides. This is only a stopgap measure, however. Man cannot stop the rain, and new slum barrios are constantly being built. The real problem is too many people crowding into a limited space.
The need for a program to slow this influx is not even mentioned in the article. To ameliorate the future problem, a great deal of money should be put into widespread family planning education and service programs throughout Brazil.
As long as additional thousands pour into the city seeking work and more babies grow up in those desolate slums to become job seekers when there are no jobs, the shantytowns will continue to grow and the rains will continue to destroy them.
As humanitarians, let us urge our government and other world institutions to help Brazil tackle the long-range need for funding and promoting comprehensive family planning programs. Sarah Epstein, Washington
Economic disarray Regarding the article ``A chicken-or-the-egg debate pits US economic theorists,'' Dec. 15: Macroeconomics is indeed in ``disarray,'' but the economist Michael Keran may only be adding to the confusion.
By returning to Swedish economist Knut Wicksell's distinction between the natural interest rate and the rate produced by central bank intervention, Mr. Keran is either reinventing the wheel or he is retaining the errors of monetarism.
Wicksell's insight was built into a comprehensive theory of the business cycle as early as 1912 by Ludwig von Mises, and Mises' theory was further elaborated by Friedrich von Hayek.
The Mises-Hayek theory blames the business cycle on central bank interventions in the market rather than on errors built into the market itself. It has held up remarkably well, including its insight that additional interventions do not compensate for the imbalances produced by earlier interventions but instead add new imbalances of their own.
Each new intervention only makes the ultimate ``bust'' worse.
Mises' ideas offer no justification for intervention in the market, and so are not much favored by interventionist economists. Edward Kaplan, Bellingham, Wash.