Evening star., 1962-01-18
Gain butNo Pump Printing
Held to Be Economic Aim
BY LEE M. COIN
Star Staff Writer

pump -priming efforts by the
Government.
Instead of trying to stimu-
late the economy, he sent Con-
greSs a budget described as
mildly restraining" by Budget
Director David E. Bell.
Discussing the budget at a
joint news conference with
Treasury Secretary Dillon, Mr..
Bell based that appraisal on the
Presidents plan for a small
surplus in the 1925 billion
budget for fiscal 1868, the year
starting next July /.
Theorists generally agree that
the Government spurs the
economy when it spends more
money than it receives and re-
strains economic activity when
the budget shows a surplus.
Another Type Budget
The $463 million surplus esti-
mated in the conventional
budget is so small that its eco
nomic impact would be prac-
tically nil. But many econo-
mistS use another type of
budget, the national income
accounts" for analysis. That
version shows a significant
surplus of $4.4 billion.
In squeezing out a surplus
at least on paper-the President
rejected the advice of some aides
and of labor leaders, who advo-
cate bigger Government ex-
penditureS to speed the econ
omy'S upturn.
But he built up his defense
against Republican charges
that he is a reckless spender,
He also made a gesture toward
combating initiation and safe
guarding the dollars prestige
in world money markets.
Degree Of Push Is Key
Even with the planned sur
plus, the spending increase of
$3.5 billion over fiscal 1862
would tend to boost economy.
It's a question of degree.
While deciding against the
extra push of deficit spending,
the President included in his
budget a variety of selective
measures designed to promote
employment and business
activity.
He proposed, for example,
legislation to refrain jobless
workers and increased outlays
for aid to depressed areas,
housing and public assistance
for the needy.
Secretary Dillon told the
news conference the admins
tration is counting on the
economy to continue rising at
least through the summer OF
1868, although the rate of gain
is expected to slow down around
mid-1962.
Mr.. Kennedy's surplus will.
depend on many iffy PROPOSE
tions, notably his forecast that
Federal revenues will rise from
$82.1 billion in fiscal 1862 tc
$93 billion in fiscal 1868.
Factors Behind Forecast
Behind this forecast of q
$10.9 billion revenue increase
lie the following official esti-
mates of economic gains in
calendar 1862:
Gross national product-total
output of goods and services
will increase by $40 billion over
1861, to a record total of $57O
billion.
Personal income will rise by
$31 billion to SAB billion, push
ing individual income taxes up
from $45 billion in fiscal 1862
to $49,3 billion in fiscal 1868.
Corporation profits will in
crease by sos billion to $56.5
billion, boosting corporation
income taxes from $21.3 billion
in fiscal 1862 to $26.6 billion
in fiscal 1868.
Excise taxes and other reve-
nues also are expected to rise
as the economy moves up.
Sees Unemployment Decline
With these gains, the Presi-
dent said, unemployment should
decline from 81 per cent of
the labor force now to about
4 per cent-the administration s
interim goal-by June of 1868.
The economic outlook, he
said, calls for the modest
surplus estimated in the budget.
He argued that a deficit during
the economic upturn might
cause initiation, while q bigger
surplus would risk choking off
economic recovery and con-
tributing to a premature down.
turn"
Administration officials and
some outside economists con-
tend that recovery from the
1889 recession was cut short
by the Eisenhower administra-
tion's sharp swing from q
budget deficit of $12.4 billion
in fiscal 1859 to a $1.2 billion
surplus in fiscal 1860, and also
by the Federal Reserve Boards
tight-money policies.
Secretary Dillon noted that