Evening star., 1954-12-27
Planners Urge
TdxCuts and
Higher Pay
Experts See Jobless
Increasing Unless
Economy Expands
By Froncis P. DoueIos

BY Froncis 2. Douglos
A recommendation for a cut In
taxes, plus higher wages and re-.
duced prices. has been made by
the National Planning Associa-
tion.
These measures were advanced.
in statement released today. as
means of increasing purchasing
power. They were coupled with
warning that if the economy does
not expand in the coming year
there will be a rise in unemploy-
nlent.
The NPA is a private, non
political organization whic h
includes representatives of agri-
culture, business. labor and the
professions. A number of econo-
mists are members of its board
of trustees and committees.
No Depression in Sight.
The organization found salts
faction in the fact that no gen.
eral depression seems in sight.
But it added that this should not
blind us to another fact--that
over the last year growth in the
output of the economy did not
keep pace with the growth of the
labor force and the rise in the
output per worker.
Barring a marked step-up in
the defense program, NPA said,
there must be a substantial rise
in consumer demand to sustain
a high level of employment.
Government measures to in
crease consumer purchasing
power, it said, should include:
1. A further reduction in taxes.
particularly those affecting con-
sumption, and further improve
ments in Social Security benefits.
2. A speeding up of public un-
dertakings, including construc-
ton of roads, schools and hos
pitals.
8. Further measures to facili-
/ tate buying and renovating
homes, modernization Of farms
and farm equipment. and the
improvement of the diets Of low
income groups.
Wage Raise Urged.
Among possible nongovern-
ment measures for maintaining
purchasing power" NPA said,
I'VE consider the most important
to be a rise in wage rates and a
reduction in prices in accord
with increased productivity"
The organizations picture Of
the present plight of the
economy was in line with the
doctrine, =. 1t takes all the
running you can do TO keep in
the same place. If you want to
get somewhere else you must run
twice as fast as that"
The statement indicated how
much the economy must expand
to stay in the same place and
how much to get ahead.
The present level OF economic
activity-the total output of
goods and services, is now at
the rate of 1856 billion a year.
It was 1865 billion last year.
NPA said the present level is
about SIS to $40 billion below the
level of reasonably full employ
ment.
More Unemployment Seen.
It pointed out that If the econ
omy continues at about the pres
ent level unemployment will rise.
This is because of the growing
labor force and the increasing
output per worker. To bring
about further reduction in un-
employment, the organization
said. there will have to be a
considerable rise above present
production levels.
Total production a year from
now would have to be about $25
to $35 billion above the present
rate in order to approximate the
level of reasonably full employ
ment," NPA stated. This would
mean a production of from 1881
to 1886 billion. or about per
cent above the peak 1853 figure.
Meanwhile, members of Presi-
dent Eisenhower's cabinet see
| the new year as one of peace,
with tensions. and of a stable
and prosperous economy.
Forecasts Are Separate.
Writing their separate fore
casts in the Nations Business .
monthly magazine of the United
States Chamber of Commerce,
several of the 10 expressed q
note Of caution. but none was
pessimistic.
| Secretary of State Dulles said
that formidable obstacles" re-
main in the path Of world peace,
but added:
! I'VE shall strive that no i'm