Evening star., 1953-10-26
U.S.. Held Well Able to Expand
Defense Budget by $22 Billion

NOB ~B1S~ ~~0A~
The United States can afford
an increased defense budget of
between $40 and $75 billion by
1856, according to a report by the
National Planning Association.
A committee of the association,
composed of businessmen and
economists, has concluded that
such program would be pos
sible without any substantial in
crease in taxes. without substan-
tial deficit financing and with
out the need for direct, wartime
controls.
1t would represent an increase
of $22 billion in the present de-
fense budget of $50 billion.
The conclusion on what Amer
ica could do in the way of de-
fenSe over long period was
based on an association study
which has been in progress for
nearly year.
Cite Immense Productivity.
The answer:
"The productivity of the Amer
lean economy is so immense
that the United States need
not be afraid of adopting sizable
additional national security pro-
grams if they are found to be
advisable in support of the cause
of security and liberty in the
free world"
The committee urged that the
size of future defense programs
be based on the requirements of
the international situation,
rather than tailored to suspected
economic limitations.
The National Planning Asso-
citation is a private, non-prof1t
organization which conducts
economic studies for agricul-
tural, business, labor and pro-
fessional groups.
The committee conceded that
a $75 billion annual defense
budget is close to the limit of a
long-sustained peacetime effort.
At this point the issue of gums
or butter" is approached. OF
any lesser figure, the committee
found:
Possible Additions.
Continuation of present pro-
grams will result in declining ex-
penditures while potential pro-
duction and income continue to
grow. Therefore, substantial ad-
ditions to the present declining
programs could be made without
additional taxes or comprehen-
Sive measures of direct economic
controls"
The findings were based on the
assumption that the United
States, in peacetime can not
afford three things:
/. An increase in taxes to. or
beyond the point where they
begin to stifle management and
work incentives.
2. Imposition of comprehen-
sive, direct controls on consump-
ton, production, prices and
wages.
8. Disruptive imitation.
Beyond this, it was assumed
that long-range security pro-
gram must allow for maintain
ing and expanding productive
capacity and some increase in
the supply of consumer goods.
The effect of three possible
programs was studied. The first
provided for an increase of $40
billion over the projected 1856
level; the second, an increase
of $40 billion: the third, an in
crease of $33 billion.
No Interference Seen.
It was found that an addi-
tional program of $40 billion
would not interfere with busi-
ness expansion or prevent an
increase in the standard of
living. Taxes due to expire at
the end of this year could do
so. After that, total tax reve-
nues could not be further de-
creased. No controls would be
necessary and the main cost
would lie in foregoing further tax
reduction and the deferment of
some peacetime programs. The
program for a $40 billion in
crease would mean continuation
Of taxes at 1853 rates, wider
use of women workers and some