Imperial Valley press., 1938-12-07
An Economist S
Viewpoint
BY John 7. Flynn

NE WYORK young econ
omists from Harvard and TUFTS
Colleges have fabricated program
for economic recovery. 1t appears
III a small book just published.
As in 1922 a stream of pro-
grams fol rehabilitating America
pours out upon our desks This
is the most intereStig I have seen
chiefly because it comes from the
hands OF men who understand tie
anatomy of the capitalist system.
The program is based upon the
theory that the continuing func-
tioning of the capitalist system re-
quireS a continuing flow of III
yeStmentS. The authors point out
quite properly that this means
thdt private industry as a whole
must pay out in capital and op-
Grating expenditures more than 1t
receives back III prices. Strange
as this may seem, it is true.
Private industry has ceased TO
do this because capital investment
has almost come to an end. There
fore these gentlemen ground their
whole plan upon the proposition
that. as private investment has
seemingly come to an end, the
government must step in and be-
come the great investor.
The whole problem. therefore, is
to organize and finance a vast
investment program
which will be permanent. The
authors disclaim any plan to dis
rupt the economy of private own
ership Private ownership having
abdicated at present the function
of capital investment expansion,
the government will undertake it
merely to protect the remaining
functions of private ownership.
Here Is the program. % a
50-year program of rebuilding
America-its houses starting with
homes for the slum dWellers. %
A vast expansion of our recrea-
tional facilities. C3D Great projects
to modernize our traffic facilities.
tD A great program of COnSerVa-
tion of resources. particularly soil
through reforeStation and fire pro-
lection, engineering works to re-
tard surface erosion and nation
al program of river and dam CO.
ordination for flood control (5)
program of educational
and health expansion.
On the welfare side they would
extend old-age benefits to all
classes and abolish the old-age re-
serve account and would reor2an-
ize unemployment benefits to in
clude all workers and supplement
benefits by elastic work projects
to afford longer subsistence when
insurance benefits run out.
The problem of financing gov
trnment investment becomes the
terrifying ogre in any such plan.
The authors advocate both taxa
ton and borrowing. They insist
tax revenues can be expanded
enormously by putting an end to
existing eVaSions and by abolish
ing taX-eXempt securities They
also advocate what this writer has
advocated, the taxing of corporate
earnings in the hands OF stock
holders rather than in the hands
of corporations-taxing earnings
rather than dividends.
AS lor borrowing, they face with
continuous borrowing,
wholly unterrified by the constant
ly rising level of the public debt
The rising tide of taxes to pay
interest they dismiss with the
proposition that this can be rem
dered harmless in economics if the
ownership is spread out among a,
the people. Then as all the people
will be taxed to pay the interest,
the interest will go back to them
rs owners of the bonds.
AS to private business. they urge
an end of trust busting. Great
aggregations of capital are useful.
The government should regulate
those that can be regulated by
controlling prices and should take
over those which do not yield to
regulation. It should take over the
railroads. regulate prices of great
basic industries and try both reg
ulatiOn and ownership of utilities.