Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-09-22
American Economic Health

The Committee for Economic DEVELOPMENT
an organization sponsored by American business
for research and analysis into problems of
national interest, Is properly concerned about
the problems of getting the most defense for
our defense dollars and the inflationary impact
OF the defense program. go 4
In expressing this concern It is not cues
tioning the detectives of the program or the
threat to the free world which arises from
Communist intentions. In fact, its recent state
ment on national policy deals at great length
with this threat and the necessity of con-
tinuing leadership by the United States in
combating 1t. Furthermore, in dealing with the
economics of this defense effort the committee
stresses its very relation to the national security
The committee rejects wisely the idea that
economy in military spending can be achieved
by across-the- board cuts in appropriation
requests. Instead, 1t proposes an improved
continuing appraisal-independent of service
interests-of military budgets, specifications of
weapons and equipment, research and develop
ment procedures, use of manpower, procurement
methods industrial mobilization and related
procedures.
Given this type of studied control of con-
tinuing military expenditures, the committee
feels that both the American economy and the
American people would not necessarily suffer
under the load of long-term security program.
The same feeling is expressed as to whether
such program would be infiationary in damag-
ing degree but on this point the committee
sounds some pertinent and grave warnings.
The impact of imitation, it is commended, has
never been fully recognized in the United States
despite the past decade Of depreciating none
tary values. The consequence is an inclination
to ride out each wave of imitation without
sufficient regard for the cumulative effects in
destruction of capital and disruption of industrial
peace An end result, only relatively better
than economic chaos, could be permanent Gov
eminent controls which would inhibit economic
efficiency and growth. The f1rst-hand experience
which many of our European allies have had
with imitation has left them with more realistic
dread of this evil while our own passivity to
its menace weakens their confidence in American
leadership.
Z It is the hope of the committee, as it has
been of many other responsible Americans, that
more than lip service will be given in the irnme-
diate future to such countermeaSureS as ade-
uuate and effective taxation, credit controls,
economy in public expenditures, restriction upon
expansion of the money supply, restraint by both
industry and labor in demanding higher prices
and wages, and the encouragement of private
saving.
3 The fact that much of this problem Of the
health of the American economy has been dealt
with before and that the avenues Of protection
have been marked out by others does not detract
from the value of this latest study. The basic
strength of the United States rests in large part
in the vitality of its economic system. No
emphasis upon this can be too great and no
sound recommendations too repetitious.