The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-01-24
Liberal Viewpoint
by DIR. HARRY ELMER BARNES

THE Townsend plan is the great contempt
rary rainbow-chasing project which ex-
presses the national yearning for social justice
at the outset of the year 1885.
Its proposal to grant a pension of 5000 a
month to everybody over go has given &c a vast
degree Of popularity. Its author can pack big
auditoriuns in large American cities while the
plan is easily the chief topic of conversation in
the country groceries and Grange halls. 1t
stirs the popular imagination as much if not
more, than the imitation schemes of year ago.
In the first place, just what is this panacea
for the ills of the Nation? 1t is an effort to
| achieve two very desirable ends, namely the res
toration OF prosperity, and adequate provision
for the aged, who now admittedly sacrificed
to our industrial and social machine.
1t proposes to achieve these goals through
payments by the Federal Government of 5000 To
every man or woman, not an habitual criminal
who has reached co. Every such person will re-
ceive check for 5000 on the first of each
month. Recipients are not to work or in any
way participate in the making of money and it
is prescribed that they must spend the entire
5000 within the month.
The expense of the plan would be trenen-
dous. In 1880 there were 10350,000 persons in
the United States so years Of age or over. The
number now probably reaches at least 1O50O.G0O
The annual cost of such a pension plan then
would run to approximately $4,000 600, 900 each
year.
N7HILE we spent even more than this sum
| w in little over year getting back Alsace
Lorraine for France and attempting to secure
the straits for Russia it is certainly staggering
sum to be applied to any such constructive cause
| as social justice. Indeed, however conmendable
the end to be achieved, it probably is an expense
| beyond the capacity Of the United States at the
| present time if the plan were to be maintained
over any considerable period The entire ma
tional income at present is hardly more than
$5o00o,000000 a year and even in the boom
| times Of the last decade it never quite reached
$50 O0O0OO0OO.
1t is obvious then. that the Townsend plan
would call for the annual expenditure of ap-
proximately one-half of our present national
| income, and nearly one-tnird even in boom
times Moreover, it is not socially just since
the persons over so in the country constitute
less than per cent of the total population
whereas they would receive from a half to q
third of the total national income
How does DR.. Townsend propose to raise this
enormous sum? He suggests 10 per cent retail
sales tax, but as M. B. Schnapper points out
IN The Nation, even if we we're willing to resort
TO tnls drastic expedlent it would not produce
anything like the necessary revenue
Even in 1929 the total retail sales in the
United States amounted only to approximately
S49 OOO,OOO0O0. At the best them this 10 per cent
sales tax would produce only $4,000 900 ,OOO and
at present sales levels only some SO 900 900 600
c1VeIl d III per cent TAX on all monetary trans
acuonS-Whlch might we'll paralyze capitalistic
ouSlness--Would produce only about $13.5OO-
100000.
\ ME Townsend advocates meet these obiec-
- lions by contending that the scheme would
increase the total national income to around
S23O,OOOO 100000 year. They contend that every
dollar OF money issued turns over ten or more
times each year before it is retired
But the facts hardly support this contention
In 1884 about $4,000 100000 were distributed in
wages, salaries and other forms of income in
the United States, but they produced total
retail sale of something less than $50 900 900 OOO
Therefore there is little chance that the pay
ment or an extra $25 900, 100000 would raise our
national income by 100000 100000.
Another argument of the Townsendites is
that their plan would enormously stimulate en-
ployment by giving to younger persons the
places vacated by those over 60. But in 1880 only
about 4,150000 persons over 60 were gainfully
employed, and many of these in agriculture. If
these were all replaced by young persons the
new jobs would not take up even one-half of
our present slack in employment-there being
approximately 100000 still unemployed.
In spite, however, of all its fantastic con-
tent, the Townsend plan may do some good. 1t
will call attention to the very real and imme-
date needs of the aged in America, and it ought
to help to assure the passage of more practical
and discriminating social insurance designed to
protect old age, such as is now proposed by Mr..
Roosevelt.