Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-03-22
U. 5. Aid Not Needed
In Slump as YET,
Economists Say
By james Y. Newton


The downturn In business
activity and rise In unemploy-
ment have not reached Q point
requiring emergency action by
the Government. in the opinion
Of a group Of leading business
economists.
That was the consensus Of
three Of the leaders Of the Com
mittee for Economic Develop
ment, which last night an
nounced q long-range program
for bolstering the economy
against recession.
1.-THE best recovery is one gen.
Grated by the economy ITSELF"
Meyer Kestnbaum, Chicago
manufacturer, said in answer to
Q question as to whether the
present economic situation called
for emergency Government ac-
ton.
Unfortunately" he added,
people expect that recovery to-
morrow. I would place it in the
early fall. We may see a level
ling of of the downturn in the
next few months, but not q
sharp upturn Of business activ-
ity."
Ride It Out Alone.
The other CEn officials
Frazar B. Wilde. Hartford,
(Conn.) insurance executive,
and Fred Lazarus, jr., depart
ment> store head Of Cincinnati,
both said they thought the
economy could best ride out the
current slump without extraordi-
nary Government measures.
The 50-page CED report, DE
tense Against Recession: Policy
for Greater Economic Stability"
the officials stressed, was a long
range appraisal of the country's
ability to resist and recover from
economic declines. It was two
years in the making and was
not aimed at the present situa-
ton.
The committee pointed out
that many changes made in the
country'S financial, budgetary
and psychological situation have
greatly reduced the tendency of
our economic system to multiply
q def1ationary impact.
while this does not guarantee
there will be no recessionS. it
does mean that what in earlier
circumstances might have turned
out TO be q severe depression
would be a moderate recession
and what might have been a
moderate recession can now be
relatively mild"
Suggested BuIwarks.
Still, the committee said, there
are a number of things which
should be done to shore-up the |
economy against severe economic |
doWnturns. Among suggestions !
in the report were:
Speedier income tax refunds.
and revision of tax law to permit
businesses to apply operating
losses against profits of the pre-
cedtng two years rather than
one year as at present.
Preparations by the Govern
ment to put into effect 'larpe.
scale tax cuts and public works
programs"
BY cutting the present high
tax rates, the committee said. it
would be possible to reduce tax
collections by billions Of dollars
on very short notice, and thus
offset a large part of the decline
in private after-tax incomes that
occurs in a recession.
THE possibilities Of adding
to total expenditures quickly .by
increasing Government expendi-
lures are more limited" the
committee continued. However.
advance plans and preparations
have been made that would ap-
pear to permit an increase of
about SIS billion in Federal con-
struction expenditures within one
year after the decision to under
take the expansion.
Planned Tax Cut.
Government plans for an
emergency tax cut, the report
added, should be made well in
advance and discussed with con-
gressional leaders. if it is to be
full and quickly effective.
In addition the administration
should be given clear authority
to adjust the terms of Federald
loans and loan guarantees to
the needs Of economic stabiliza-
ton, and coordinate them
through q Federal Loan Coun-
ell"
The report said there is still
considerable room for easier
lending terms especially for
modernization loans and for
mortgages on higher-price d
homes"
The committee also outlined
ways for individual businesses to
cushion the shock Of q down.
town, and it cautioned against
automatic cuts in advertising
and sales budgets in a time Of
declining sales" Instead, it said
business should look into the pos
abilities Of increasing sales by
"redoubled efforts In an economy
where income and savings will
still be large"