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).