Evening star., 1942-02-08

the Federal ReserDe System.
wiser to the Board of Governors Of the
Federal Reserve System.
On the one hand, it describes, in lucid,
straightforward English, the program the
great majority of New Dealers would
follow If in power when hostilities cease;
on the other. 1t predicts what Will hap
pen II the Government does not con-
tinus its control Of industry and finance
by taxing and spending.
DR.. Hansen bases his postwar eco
nomic structure on three major premises.
The first is psychological:
I'VE have to make up our mind as
q Nation that we will not permit post
war depression to overwhelm u.s.
Depends on Cooperation.
The second relates 10 resources, physi-
cal and mental:
1--WE shall have, when the war is
over, the technical equipment, the
trained and efficient labor and the nat
ural resources required to produce
substantially higher real income for
civilian needs than ever achieved before
in our history. q Whether o. not We
shall, in fact, achieve that level will
depend upon our intelligence and ca
pacity for cooperative action"
The third outlines DR.. Hansen's con-
ceptions Of the functions a private en-
terprise and Of Government:
Private business can and viii do the
job Of production. 1t Is the responsibility
of Government to do Its part to insure
q sustained demand Private industry
and Government together must act to
maintain and increase output and in
come sufficiently to provide substantially
full employment"
The keystone of Dr.. Hansen's struc-
ture is full employment" which he
would guarantee, as far as possible, by
taxes and the expansion and contraction
of the governmental debt. In theory,
this was the New Deal program from 1888
on; in practice, taxes and the debts ex-
panded, but did not contract. DR.. Han
sen does not dodge the probability Of
ever-increasing debt. He retortS that
idleness Is q greater menace than debt.
OF taxes and the public debt he says:
Under a program of full employment,
new enterprises would grow up; old en-
terprises would expand. Youth would
fnd opportunity and employment.
"The notion that We cannot finance our
own production is quite without founda-
ton. Every cent expended, private and
public, becomes income for members OF
our own society. Costs and incomes are
just opposite sides of the same shield.
We can afford as high a standard of
living as we are able to produce. We
cannot afford to waste our resources of
men and material. We cannot afford to
use them inef1ciently. But we cannot
afford idleness. The idleness Of the dec
sde of the '30s was responsible for the
loss of $500 900, ,0O0, 900 of income.
Payments to Ourselves.
1.-THE public expenditures required to
rebuild America, to provide needed social
services and to maintain full employ
ment can be provided for out Of the
enormous income which the full utiliza-
ton of our rich productive resources
(material and human) makes possible.
The costs of producing this income are
merely payments to ourselves for the
work done.
There Is not-there cannot be-any
financing problem which is not manage
able. under a full employment income.
From 100000, 900 900 income we can
raise large tax revenues-large enough
to service any level of debt likely to be
reached and to cover all other Govern
ment outlays-and still retain for private
expenditures more than we had left in
former years under $4,000, ,000, 900 in
come with lower taxes.
Everywhere 1t is said and constantly
reiterated that we must tighten our belts
and pay on our Government debt when
peace returns When Is 1t desirable to
pay OF part of a debt? Certainly not
when there is danger Of an impending
depression Under certain conditions 1t
would be desirable to do so. Under other
conditions is would be quite unsound
policy to retire the debt.
"A public debt internally held has none
of the essential earmarks of the private
debt of an individual. A public debt is
an instrument of public policy. 1t is q
means to control the magnitude of the
national income and in conjunction with
the tax structure, to affect income dis
tributiton."
Most postwar plans are inadequate
because too nebulous and long-ranged.
Or. Hansen starts with the present and
carries his specific program only to 1850.
For the war period, he indorses the Ad-