Retailing sluggish

By Frank W. DennY Chairman/CEO Builders Square

Y THE TIME the December issue of The Merchant Magazine appears this country will have elected a new President.

It is almost certain that a tax increase, effective in

1990, will occur as our country continues to spend at even higher rates. This increased spending trend is evidenced by the 1988 dehcit being hisher than the 1987 deficit, versus "n- $gO billion reduction in 1987 from 1986 levels.

The country cannot continue to incur $150 billion annual dehcits and, in fact, our interest paymelts on this massive debt account for much of the current deficit. After eight years of Reaganomics, it is apparent to me that this ecbnomy, with its present governing body, cannot grow out of these deficits.

Story at a Glance

Tax increase almost certain changes needed to stamulate growth sluggish retail environment . . . limit on corporate mergers probable.

Two changes need to occur to stimulate a higher rate of growth and a decline in the national debt:

(1) Real legislation attacking the spending policies which may have short term negative results on retailing, farticularly important is the "line-item" policv again. to limit corporate reorganizations by setting iapitlt ritios and the deductibilitv of acquisition interest.

'This will effectively preclude the pure leverage players from the takeover and sell-off activities of the past six years. In enacting this legislation, Congress will be "savine" iobs in America while at the same tlme lncreaslng taies to lower the deficit.