Evening star., 1952-12-29
Arms and Our Economy

that the United StateS-an "aggressor" intent
upon "unleaShing third world War"-iS rearm-
ing in desperate effort to keep its "bourgeois-
fascist-capitalistic" economy from smashing up
Our country, SO goes the theme, cannot
afford peace; prosperity is based solely on
the fact that we spending billions and
billions on planes tanks, guns atomic bombs
and other weapons; our free-enterprise SYSTEM
If we stopped or sharply reduced such spending
would 60 into tailspin forcing our factories to
shut down, and all of would then suffer
vast and unprecedented misery of unemployment
and economic depression
CuriouSly enough, as shown during our recent
political campaign, more than few Americans
seem to believe that this Soviet propaganda
though on the whole monstrous lie, may be
quite right in one respect-namely, in what it
has to say about our prosperity being dependent
on military outlays. Thus there is a rather
widespread feeling among us that the Nation
is likely to suffer a severe economic wrench, and
perhaps even a major depression, after our
defense program reaches its peak in 1854 and
when our rearmament spending thereafter be-
gins to taper off substantially.
Such view of our future, however, appears
to be ill-founded to the point of being naive At
any rate it is a view that looks much less than
sound when stacked up against the survey made
recently by the staff of experts attached to the
HouSe-Senate Committee on the Annual Eco
nomic Report. For these experts are unanimous
in believing that our economy will enjoy power
full sustaining forces for a long time to come"
that there is an ample basis for business opti-
mism" and that our country should keep on
being highly prosperous for many years after
our rearmament outlays markedly reduced
and placed on a maintenance basis.
In making this roseate prediction, the con-
oc4o
ton number of factors that Moscow's propa-
gandists, together with pessmistic Americans
seem to have overlooked. One of the factors is
this: That today our military spending which
in relation to our output capacity is not nearly
SO great as Russia's-repreSentS only about IS
per cent OF our gross national product and that
it will continue to hover in the neighborhood of
10 per cent even after the tapering-of process
is started In the circumstances, anxiety over
the economic consequences of rearmament cut
back-a cutback not likely to be spectacular-ha
little basis in fact.
But more important than anything else
according to the congressional economists, are
such factors as these: % That there is a tre-
mendous backlog of demand for construction of
every type private and public; (2) that invest
ment needs to meet this demand are estimated
to require an outlay of $500 billion between now
and 1960-$300 billion for durable equipment and
non-residential building, 500 billion for housing
$50 billion for highways, and $40 billion for
schools and hospitals; 80 that we have huge
accumulation of savings by the consuming public,
and ~ that population growth-the most sig
nificant condition of all-is enlarging Nation
by upward of 20 million Americans every decade
With these and similar considerations in
mind, the congressional economists have not
hesitated to be reasonably optimistic. Our
American economic future, they see it, seems
to be quite reassuring and encouraging. In the
words of their report with the stimulus of the
indicated investment opportunities private con-
sumption of the continually increasing popula-
tion may well be expected to surpass even the
high levels of recent years, particularly with
constant improvements In productivity and per-
sonal income"-a judgment substantially con-
firmed in the study just issued by the Commerce
Department.
Perhaps this may prove to be an excessively
hopeful or wishful view But it makes enough
sense to suggest that the Russians, If they really
believe their own lies, are in for big
prises. 1t suggests, further that pessimistic
Americans would do we'll not to underestimate
the durability and elasticity Of their tree-enter-
prise economy.