The efficient will prosper

By Frank Denny President Builders Square, Inc.

without a decrease in government spending.

We will not really make significant economic progress until we bite the bullet and enact the spending cuts necessary to balance our budget. Over the past 20 years our government has collected taxes at the approximate average rate of l9o/o of the GNP. In 1986, we will spend at a rate approximately 240/o of the GNP. Obviously, to maintain the current deficit, we must spend at a rate equal to the income rate (taxes). To reduce current debt, spending must be brought to a rate

Story at a Glance

Flat retail sales. old rules will no long apply . new concepts, distribution channels, electronic systems to offer more productive operations.

lower than the collection rate to reduce the deficit.

With this action, I believe we will have a short term negative impact on the economy, but it appears Congress is ready to face facts and act on this issue. As our government faced major reform of the income structure of the country in 1986, they now must focus on establishing more efficient spending habits.

In view of the preceding, only those of us who operate efficiently will prosper through these trying times. Old rules do not apply as demonstrated by companies like Price Club, who truly established a new method of retailing. If we measure our own efficiency ratios against the Price Club, we discover quickly that there are more efficient ways of operating than the tradi-

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