Evening star., 1951-01-13
Austerity for All of Us

The Presidents Economic Report to Con-
gress, although drawing highly encouraging
picture of the actual and potential productive
might of the United States, has left no room
for doubt that if that might is to be properly
harnessed for the defense of the Nation and
the rest of the free world then the American
people must begin at once to adjust themselves
to inconvenience and sacrifices essential to
the task of carrying very large new burdens
of long duration" In other words, whether or
not the present crisis explodes into a global
war, the Kremlin- created threat of universal
Communist aggression has made it imperative
for all of us to abandon the idea-and to disci-
pline ourselves accordingly-that there is any
near-future likelihood of our being able to en-
joy normal, peacetime way of life.
AS the President has said in his report,
our economy unquestionably is capable of doing
what needs to be done to cope with the grave
menace now confronting us. Thus, as meas
ure of our immense productivity which is the
most prodigous ever developed in the history
of the world, he has cited the fact that our
overall output has increased more than so per
cent since 1940-a figure compounded of marked
gains in farming, manufacturing, oil refining,
steel capacity, electric power and virtually every
other field of enterprise. But by far the greatest
part of this tremendous agricultural and in
dustrial outpouring has been made up of civilian
goods and serviceS-an outpouring whose direc-
tion must now be diverted in very large measure
to defense channels. And the diversion, as
Mr.. Truman has emphasized, simply cannot be
carried out in a painless manner.
This can best be understood if all of us
bear in mind that the magnitude of the Com
munist threat is forcing the United States to
embark on security programs whose cost for
fiscal 1851 and 1852 probably will total, accord
ing to the President more than $40 billion. At
present our defense expenditures are running
at an annual rate of about $40 billion, but by
next January they should range up to as high
as SIS billion. Moreover, although we should
be able to increase our total output by upwards
of per cent within the next IL months and
by at least Is per cent within five years, we are
plainly entering period, as Mr.. Truman has
warned, when "the excess of consumer demand
over available goods will rise by many billions
of dollars" This prospect, incidentally, is based
on the assumption that total war can be
averted and that our mobilization can therefore
be limited. Obviously, if that assumption proves
wrong, then the Presidents estimates must be
boosted accordingly
But even If we assume the best-namely
that total war can and will be averted-it is
abundantly clear that our preparedness effort is
going to impose severe strains on our economy
for long time to come The shift from civilian
to military production inevitably will create
problems as to the ALLEGATION of raw materials
finished products and manpower-problems that
will call for an increasing expansion of controls
In addition, growing shortages of consumer
goods, plus fun employment, are certain to
create what the President has called intense
and mounting inflationary pressures"-pressures
that must be checked to prevent the disaster
that could result from wild process of wages
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Finally, unless soundly financed, the tremendous
Federal expenditures involved could lead to a
series Of deficits astronomical enough to wreck
the credit and fiscal integrity of the Nation
So the President, speaking in more or less
general terms in his Economic Report has come
out in favor of what might be called an austerity
program for the whole Nation-for farmers, for
industrial workers. for professional people, for
the managers and owners of businesses, for cor
porate interests, and for all other elements
making up the country, including the Govern
ment itself. AS far as Government is concerned,
for example, he has indicated at least partial
agreement with Senator Byrds view that non-
essential expenditures must be drasticaly re-
duced. BY the same token, to curb imitation and
do the best job possible as fast as possible, he
has called for prompt action to increase pro-
ductlvity by plant expansion and longer hours
OF work, and he has urged speedy steps to sta
bilize wages and prices AS for the budget, he
has declared that 1t should be balanced on
pay basis-a principle that means
much higher taxation" genuinely painful tax
alton, for corporations and individuals alike
In ensuing weeks, the President will back
up these and similar broad proposals with specific
recommendations Meanwhile, although it is
predictable that much of his program will be
subjected to severe public and congressional
debate as to details and methods, there can
be little argument with the basic thesis of his
Economic Report For it is inescapable, given
the kind of world we have and the grim nature
of the threat we face, that the United States
from here on out, and until it's security is guar
anteed is one way or another-with or without
the arbtrament of general war-wil have to
give up the luxury of easy living. The times are
hard, and they are likely to get harder, and all
of us who are part of them must be ready and
willing to accept whatever sacrifices they may
entail We must do that to be worthy of our
heritage We must do it because our very
survival as free Nation may we'll depend upon it.
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