The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1939-1949, 1942-08-06
ECONOMIC IIIGHLIGHTS

ECONOMIC HIGHLIGHTS
Britain has had forced savings
for over a year." says Business Week.
Canada just broke down and put it
in the new budget. We are going to
have it soon. It's "a question when
and what sort. Several agencies are
already working quietly on blue
prints"
The government, in both it's leg
islative and executive branches, has
so far shown remarkable ability in
avoiding coming to grips with the
forced savings issue. Secretary Nor
genthau has said that he hopes that
voluntary sales of War Bonds will
prove adequate to absorb excess
consumer income For the most part,
Congressman have looked upon the
forced savings idea as political
orgre of horrible mien, which might
cost them votes next November.
However, the bulk of economists
seem to be convinced that, whether
for good or i'll, some type of forced
savings will eventually have to be
adopted.
The arguments in behalf of forced
savings are simple enough. This
year, the national income is reach
ing an an-time high, due to the $751;
000,000,00O, which is being spent for
war production. The pockets of the
people, especially those in the lower
income brackets, are better lined
with currency than they ever have
been before. AT the same time, the
supply of goods available to civilians
is steadily diminishing and it will
keep on diminishing until the war
ends, unless an unlooked-for pro-
duction miracle occurs. The COM
bination of more money and less
goods adds up to but one thing: in
flation. Even today, despite govern
ment price ceilings and controls, an |
ominous "black market" - similar to
the European black market, is grow
ing in this country. Inscriptions
men are bootlegging tires, sugar,
metals and other controlled items
precisely as liquor used to he boot
begged in the prohibition era, and
they are demanding and receiving
extortionate prices, A ten-dollar tire,
for instance, will bring $50 and oft
en- more in the black market.
Economists of all the schools agree
that initiation can be prevented only
If some means is found to absorb and
make inactive a large part of the
pub1ic's income. Taxes, the theory
continues, offer only a partial solu-
ton Congress obviously feels that
the new tax bill, which is unprece-
dented in severity, comes pretty close
to the limit. On top of that, it is
generally believed that the people
will balk and yell for relief If taxes
go much higher Sales of War
Bonds have been excellent, but they
haven't closed the so-called "infla-
tion gap" Therefore, the argument
goes, forced savings constitute the
answer. =@,sz- r. e. r2s-=@1S Ga
In England, the forced savings
plan seems to have worked reason
ably well. Under it, tax rates are
linked to the hilt-but part of what
the Englisf1man pays will be return
ed to him after the war. In 9TH
er words, he simply builds up a credit
with the government, which will be
rebated once the guns stop firing. Tt
is likely that if and when forced
savings is adopted here, we will fol-
low the English plan in essentials.
There are other possible methods.
For example, Congress could pass
law making it obligatory for every
one to put ten percent of his earn
ings in War Bonds. Then, to fur
ther encourage savings, deductions
would be allowed for private savings
i'm making income tax returns.
Whatever method is finally decided
on, the main point will be to take