Milford chronicle., 1958-03-07
ON WITH THE RECESSION

The announcement has been made in
Washington that unemployment in the Uni
ted States has now reached 100000 per-
sons. That is a pretty fair percentage of the
total number of working Americans.
This is of great concern to every govern
ment economist and every u. S. citizen be-
cause when unemployment reaches this to-
tai, with prices and wages continuing to go
up-as sales go down in a number of phases
of the economy-something is obviously out
of kilter.
In fact the economy is now at crucial
point along the road to tomorrow. Either
we have an upturn soon or we move into
depression. Car inventories are piling up,
steel is slow ESTIMATED at fifty-five per cent
of productive capacity and plant expansion
is being reduced considerably
This, combined with a farm recession,
now in its fourth or fifth year, and farm
policies which are failing, necessltate large
governmental outlays to prevent the depres-
sion that could occur without heavy federal
spending, including defense spending.
We do not think depression will follow,
largely because of high levels of defense and
other government spending But this will
be an artificial prop to the economy, that will
probably cause some more imitation, and
which will probably leave the economy
eventually-in a more precarious position
than it was in before, or is in right now.
farm legislation, labor legislation, and in
fation controls, so that the eventual read
justment will not be severe. The present ad-
justment would be far more severe were it
not for the international situation, armed
services payrolls, unemployment payments,
social security income and local and state
government expenditures, which are at
high level.
President Eisenhower says the economy
will experience an upturn by the summer,
and hints that he will favor cut in taxes if
there is no such upturn. However, if there
isn't, Congress will then be adjourning, and
any tax action would have to wait until 1853.
In the meantime, if the Administration is
misjudging the situation, the recession could
grow more severe.
PRODUCTIVE CAPACITY
One of the major questions posed by the
current recession has nothing to do with op-
timism or pessimsm, faith in America or
lack of faith in America, the election of Dem
ocrats or of Republicans. This question is
factual: Have increases in productive capac-
ity outstripped employment?
In other words, can the American econ
omy now produce so much more with fewer
workers than it could 10 years ago that few
er workers are needed in manufacturing in
dustries? Too many people today talk about
the recession and the American economy
without thinking much about automation,
which has been quite rapidly introduced in
America during the last few years. Along
with automation, we are witnessing the de-
velopment of new skilled workers, especially
as a result of recent chronological advances
and the development of thermonuclear en-
ergy. Older skilled and semi-skilled workers
are threatened
Automation can be boon if displaced
workers are re-trained for other jobs, and if
the effects of automation are cushioned.
Otherwise, it can wreak havoc on American
working people. These are all factors in
volved in the recession. They should be
thought about seriously, but outside the usu-
al framework of politics and optimism ver-
sus pessimism.
A HOPE FOR TAX RELIEF
The steeply graduated rates of our pres
ent income tax structure cOnfiscate up to 81
per cent of individual earnings and levy a
81 per cent tax on corporate income.
Congressman Sadlak, Republican, and
Congressman Herlong Democrat, have in
troduced bill which would remove the road
blocks to the industrial expansion and re-
search needed to create more jobs and raise
living standards. Their bill would give tax
relief to both individual and corporate Fed
eral taxpayers, with AZ per cent top for
both individuals and corporations. The cuts
would be made gradually over five-year per-
od and because normal economic growth
would expand Federal revenue, the Trea-
sury would not suffer.
The Sadlak-Herlong bill would go long
way toward removing the shadow of confis-
catory taxation that looms large over every
business conference table, dsrupting indus
try's traditional function of planning and
providing for the expansion, research, plant
maintenance and job opportunities that have
made America the most prosperous nation
nm earth