Wairarapa Times-Age WEDNESDAY, APRIL 29, 1942. STABILISING WAR ECONOMY.
ALTHOUGH the United States has been a belligerent lor less Xi Ilian five months, it is already and very definitely under the necessity of adanting and adjusting its national economic policy to war conditions. The proposals to that end President Roosevelt has advanced in a Message to Congress are of great interest and importance, less perhaps as embodying anything novel or sensational than as a telling statement of the conditions which must, be satisfied by any nation, great or small, wishing to mobilise for war a maximum part of its resources and to reduce to a minimum the strain and hardship involved.
Heavy taxation, which will reduce personal and corporate profits to a low level, maximum saving and investment in war securities, the stabilisation of prices, wages and other earnings, including the returns of primary producers, and the rationing of essential commodities in short supply, are the principal measures recommended by ulr Roosevelt. Lt is notew oithy that while he considers that voluntary saving should be relied upon as long- as possible, the President apparently desires that Congressional action should be taken to give effect to the seventh item in his policy programme, which is:— Discourage credit and instalment buying and encourage the paying oft of debts, mortgages and other obligations, for this promotes savings, retards excessive buying and adds to the amounts available towards credit for the purchase of war bonds.
If this policy—-a decisive reversal, of that of the general war moratorium —is adopted and carried success! idly into effect in the United States, the results should be worth watching. There is much to be said for the view that in war time mortgage and other debt obligations should not be suspended except in particular cases and where adequate reasons are shown for taking that course.
The root problem in any country at war is that of preventing a disastrous rise in the cost of living. The outcome of the measures falcon and to be taken to that end in the Lmited States, which presently will be spending more than half of its entire national income in furtherance of its war elfort, should provide an object lesson of the greatest value and significance.
A war like this one cannot be fought without reducing’ standards of living for the time being, but it undoubtedly is possible by a wise direction of economic policy to spread equitably the burdens entailed and to avoid wrecking the foundation on which post-war recovery must later be built. It is possible that the handling of these problems in the United States may afford useful guidance to our own country, amongst others.
Our own war economic policy has its features of merit, but the proportion of our national income made available, from revenue and savings, in furtherance of tlie war effort, can hardly be regarded' as adequate. AVe have departed from a sound policy of stabilisation, too. particularly in raising the monetary earnings of a section of the population. Apart from its generally inliationary effect, this action is grossly unfair to pensioners, superannuitants and all other people of small fixed income.
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Wairarapa Times-Age, 29 April 1942, Page 2
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525Wairarapa Times-Age WEDNESDAY, APRIL 29, 1942. STABILISING WAR ECONOMY. Wairarapa Times-Age, 29 April 1942, Page 2
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