Beware the Spending Panacea

Abstract

POSTWAR PLANNING has become our most popular indoor sport and, as might be expected, the great majority of plans envisage extremely favorable economic conditions for the immediate future. Almost all plans are based on a certain assumed level of national production. Some hold the country must have a national product of 150 billion dollars a year in order to maintain a sufficiently high standard of living. Henry Wallace puts the needed annual product at a level of at least 175 billions. Market analyses made by industrial concernc show the enormous potential demand that exists for automobiles, homes, household equipment and many other things, and on the basis of these reports it is generally assumed that the country is assured of a very high level of industrial production for at least several years. But the only plans that have been offered which make any attempt to show how a high level of prosperity may be maintained over a period of time, or how the obstacles that prevented such sustained prosperity before the war are to be overcome in the future, are based on government spending, which represents an untried theory loaded with dangerous potentialities. If our government embarks upon a postwar program of Federal spending, as now seems entirely possible, the eventual result may well be a drastic change in the economic and political structure of this country. Consequently, it will behoove the American public to consider carefully just what government spending implies, before cheerfully permitting Congress to place its reliance upon any such program.