Evening star., 1949-02-28
Joint Economic Report
y;
Backs Truman Plan
For Standby Controls
CONTINUED From First Page.

NSOIlGlI1ucu E1UIu TlISt SdSEJ
for a $4.oOO,Ooo,000 tax increase
the report suggests approval o1
that, but doesn't come right out
snd say so. There rs no nat in.
dorsement, either, of the Presi.
dents controversial proposal fol
Federal authority to build indus,
trial plants. On that issue, the
document cites testimony by one
Of Mr.. Trurnan's economic advisers
tslat the President feels the mat
ter should be studied.
The document calls for lowerIne
Or removal of excise taxes on such
Hems as passenger travel on trains
Snd planes, and on oleomargarine
Recession Talk Premature"
In urging economic controls
the report says:
1T seems premature to speak
Of recession and absurd to speak
Of depression when all the basic
industries are continuing to pro-
duce at capacity.
IAN that has happened with
recent price declines) has been the
return in a few areas to buyers
markets. to preWar or peacetime
patterns OF seasonal fluctuations,
I'd competitive markdowns on
sloW-moving items.
I'm short. 1949 is probably going
u be a boom year, perhaps not
as good as l94s in dollar terms,
bpt no worse than 1947."
II that is the case, the report
adds. 1T is decidedly the kind of
a. year in which this Government
should at least attempt to retire
at least three or four billion dol
lars of the Federal debt"
Little Hope for Budget Cuts.
Then. getting around to the tax
issue, the report says that such a
payment on the debt can only
come out of q surplus of receipts
over expenditures. Because of
the huge national defense pro-
gram and the broad foreign aid
program, there is small likelihood
that the record spending contem-
plated in the Presidents budget
can be pared. the report says.
The document calls the al
tentative" Of paying higher taxes
'Lnpalatable," but then launches
on a discussion of who should
carry the burden of a tax in
crease. The conclusion-generally
the same as Mr. Truman's-is:
The economic evidence points
unmistakably to the conclusion
that If additional tax receipts are
obtained from those who have
been the most abundantly show
cred with the blessings of inf1a-
ton. they should come from cor
porate profits and the upper
income brackets"
Curbs Would Be Used Sparingly.
The report says standby price
control authority. permitting no
ceilings at levels lower than De-
cember. 194S, prices. would be
only "sparingly used when abso-
lutely necessary"
The document added that
merely by being avatiahle' the
price-wageA control authority
would exert a restraining inhu-
ence on short-sighted speculative
and profiteering elements in busi-
ness and labor that are now so
enamored of immediate gains as
to injure the long-run welfare and
profits of everybody, including
themselves"
Then: IF a few industries or
unions get away scot free with
excessive inflationary prices, prof
Its or wages. the others who can
do likewise but don't are penalized
for economic craftsmanship"
Relief Called "Infinitesimal."
Any relief that low-income
families have had from price de-
clines is "inflnitesimal," the re-
port says, adding:
The rave press notices given
the faint drop in the cost of living
since August of 1948 seem like
sardonic mockery to them. The
consumer price index is still u per
cent above 1889 levels ."
AS for the general outlook, there
Is this comment:
THE attainment of our inter-
national objectives depends upon
the maintenance of a sound
economy now. 81 is dificult to see
how we can afford to take
chance
THE present and prospective
national security programs must
be superimposed on an economy
operating at near capacity levels
There is little slack in manpower;
no slack in raw materials >;
no slack in plant capacity
not much slack in prices; no slack
in the Federal budget, and no
slack in the national debt OF
1882, 900 100000"
Senator Taft. Republican, OF
Ohio, a member Of the joint COM
mittee, told a reporter before the
report was distributed that the
Republicans expected it to call for
practically blanket approval OF
the Truman program. He said
the COP members would not pass
up an opportunity to blast the
document, and the presidential
program, as planned economy.