Evening star., 1952-01-17
The Hard Job Ahead

The Hard Job Ahead
In addition to giving sobering preview Of
the Federal budgetary picture for fiscal 1855
which begins next July-the President In his
Economic Report to Congress has made clear
that the hardest and costiest part Of our defense
program still lies ahead. He has made clear too,
that national steadfastness, a considerable meas
ure OF sacrifice and as much unity as possible
will be vitally needed If the great and urgent
task is to be carried through to successful COM
pletion.
On the bright side, the President has re-
ported that impressive progress has been made
since the start of the Nations partial mobiliza-
uon 18 months ago. Since then, dating from the
outbreak of the Korean war, our armed forces
have been more than doubled. Our outlays for
our major security programs including atomic
energy and foreign economic and military aid
have risen from an annual rate of SIT billion to
about $45 billion. Our production of STEEL alumni
mum, electric power and other items indispensable
to rearmament has scored notable gains, and Is
still scoring them And all the while, despite
this shift in emphasis to guns, the supply of
civilian goods-the "butter" of our economy
has been maintained at an extremely high level
All this has been made possible primarily by
the remarkable postwar growth Of our productiv-
ity. Thus, measured in terms of constant dollars
that is, figures making due allowance for in
fation), our total output has climbed from about
$270 billion in 1947 to some $500 billion in 1885,
and since the Korean outbreak 1t has increased
another $50 billion to yearly rate of $3.50 billion
Moreover, according to the President, 1t can and
should show an additional gain of at least per
cent, or between SIS billion and $40 billion during
the next IL months. This expanding economy
which with durable peace could double our
present living standards within a generation-is
the chief reason why we have been able thus far
to have plenty of civilian goods while undertak-
ing tremendous preparedness program.
But the preparedness is still in the build-up
stage, with the main effort yet to be made before
mere orders-such as for planes-can be trans
lated into large volume of "hard goods" on
hand. The most difficult problems will come in
the current year. In Mr.. Trumans words, it is
crucial year in which we simply cannot have
business as usual, consumer enjoyments as usual,
or Government programs and services as usual"
For there is going to be rapid increase in mill
tary spending about $40 billion above the present
$45 billion-and this in turn will place heavy
new strains on our manpower, our physical plant,
our natural resources and our living standards.
Among other things the diversion of materials
will require greater curtaiment of nonessential
private and public projects. Further, inhationary
pressures-quiescent in 1951-will mount again
because civilian supply will not keep pace with
growing purchasing power.
More important still is the Federal budgetary
outlook. According to the President the Govern
ment, which does not hope to taper off on defense
expenditures until 1854 at the earliest will spend
an estimated total of ST. billion against income
of about $63 billion in the current fiscal year-a
prospective deficit of around So billion. As for
the next fiscal year, ending in June, 1858, the
outlays are expected to rise to an annual rate
approaching 800 billion and Mr.. Truman has
warned that that will mean deficit approximate
ing SIG billion unless there is additional taxation
Hence, besides recommending such measures as
a renewal and strengthening of legislation con-
trolling credit, prices and production, he has
urged Congress to help fight imitation by increas-
ing tax rates and plugging loopholes to raise
something like SIS billion in extra revenue.
JNdging from first reactions at the Capitol
Congress is not likely to vote for such tax boost
in this electioneering year. Yet the staggering
red-ink figure projected for fiscal 1858 can be
reduced only by additional revenue or drastic
economies. Drastic economies, however, can
hardly be made-not safely or sanely, at any rate
in budget made up predominantly Of defense
program that must be carried out at all costs If
the United States and the rest of the free world
are to become strong enough to prevent war, or
win 1t If 1t cannot be prevented. The politics
of the season may rule out unpalatable legisla-
ton, but the fact nevertheless remains that
unless we are tough with ourselves at this stage,
unless we drive ahead with our preparedness as
soundly and as fast as we can, the day may well
come when all of us will bitterly regret our self
indulgent softness.