WHOLE OR NOTHING

Hawera Star, Volume LIII, 17 June 1933, Page 11

WHOLE OR NOTHING

When in Doubt" Expand “TUHEN the question is raised whether a 'Tv particular piece of expenditure will make it necessary to increase taxation it is no • enough ' merely to compare the prospective money yield of the proposed investment with tlib interest payable on the money borrowed to finaiicF it,” says Professor Pi'gou, of Ivmg s College, Cambridge, in a letter to “The Times. “It' is necessary also to. bring into account the savings that are made in unemployment benefit; Thus, if a new ship costs £1,000,000, and because of the new, employment directly and indirectly created in building it, the net cost of unemployment relief is diminisnod bj, saj £200,000, the prospective return on that ship should, from the point of view of the community as a whole, be balanced against the interest, not on a million, but on £SOO,OOO. “In different circumstances the savings on unemployment benefit clue to new enterprise will be different. If, by indirect psychological reactions, confidence is stimulated and a culminatiye movement towards expansion started, they may be enormous. These are matters of speculation. But there is enough of certainty for one definite conclusion. If an enterprise is likely to fall short by only a little of being directly remunerative to the investor, it is sure to be remunerative in a substantial degree to the community as a whole. When in doubt, therefore, do not suspend judgment; above all, do not contract. When in doubt, expand.”