Evening star., 1938-01-05

come into the picture with the Gov
ernment as the guiding influence in
the making of prices.
Government economists and plan
ners are working overtime preparing
memoranda and suggestions looking
toward coordination of business
activity under some form of Govern
ment guidance to be called, for the
moment 'co-operation" 1t is denied
that the N. R. A. will be revived, but
it Is admitted that the code machinery
set up by the N. R. A. would. if it had
been retained, have been very valuable
today in furnishing a mechanism
through which the new policies of
GO ordination or GO operation"
could be put into effect.
Spending for Armaments.
Meanwhile Government spending for
armaments rather than road building
and for stimulus to housing rather
than public works subsidies that are
not reimbursable is expected, along
with big subsidy to agriculture, to
put bottom under the farmer and
the unorganized worker" as Gov.
Eccles of the Federal Reserve Board
expresses it in his plea for Government
action that will stop the recession by
sustaining buying power"
One must distinguish nowadays be-
tween the short-range or immediate
plans to stop the recession from grow
ing worse and the long-range plans
for the achievement of a 100000, ,000,-
600 national income.
In many respects the present era in
Washington resembles the winter of
1888 when all sorts of plans were being
offered through senatorial committees
and directly to Mr.. Roosevelt in the
hope of bringing economic recovery.
But whatever plan is brought for
ward must stand the acid test of eco
nomic soundness, which is but an
other way Of saying that purchasing
power must be increased. production
must be increased, real wages must be
increased, and the Government of the
United States must remain solvent.
and If all these factors are present
the scheme can be said to be eco
.1omically sound.
So Much Pussyfooting.
The real trouble is that there is in
political government so much pussy
footing with realities. Very timidly
do the political-minded approach the
question of increasing the output per
man, not excessively, but sufficiently
anyway to justify the big increase in
total pay roll. Very timidly, too, does
the political mind approach the ques-
ton OF reducing taxes and reducing
direct government outlays for things
that benefit particular districts and
make votes.
Everybody will agree with Mr.
Roosevelt that a 100000, 100000 ma
tional income would solve many of
our tax worries. For then S17,000,-
100000 cost of government, which is
the total of Federal, State and mu-
nicipal, would not be hard to bear be-
cause it would be only II per cent of
the national income.
What America today is struggling
with is a s17,OOO,O 100000 cost of gov
GI1lIIlSllt ulNlucu lIllO Soo,UUU,UUU,.
900 national income for 1887. That's
approximately rs per cent. 1t means
that one dollar out Of every four dol
lars produced by all businesses and all
occupations goes to the Government
in taxes or sums loaned for deficits.
That occurred in a relatively good
year.
Now in 1929 America had an $751;
600. 100000 national income, but the
total cost of government was only
$13 200. 100000. That was about Is
per cent of the national income.
When we consider that America
never has gotten beyond $81 200, ,00O.-
900 in national income and that the
national income has been climbing
back up from the depression low of
$38 900 000,0 900 in 1882 at the rate of
about $5,000O0O000 a year increase,
1t Is difficult to see how we can reach
the 100000, 100000 goal for another
six years.
Higher Taxes Boost Prices.
Meanwhile can anybody guarantee
that the national income will not
stand still or even break down as it
did in 1881 and 1882? When taxes
get to the danger point, 1t means high