S.y Handouts Endanger Economy

Basing its facts and figures on official records of the Commerce and Treasury Departments, the Budget Bureau, the President's Council of Economic Advisers, the Federal Reserve Board, the Federal Security Agency, and state treasurers over the nation, the Tax Foundation of New York, issued a statement warning the federal and state governments of the country of the imminent dangers from increasing handouts that raise a threat of fiscal stability.

The Tax Foundation is a private, non-profit organization, composed of and directed by many of the nation's leading business authorities. The release was made in the shape of. a 209 page booklet entitled "Facts and Figures." "As the nation enters a new decade, faced with greater expenditures for defense and foreign commitments," it said, "the ability of the economy to continue to support social welfare programs at constantly higher levels is a moot question'"

It said that welfare programs, begun "modestly under the goad of depression," paid out a staggering $5,500,000,000 in 1949, "and indications are that greater amounts will be spent in the decade ahead."

It did not condemn the programs. It questioned the u'isdom of doling out still more when the already gloomy economic picture is taking on more ominous tones.

It should be remembered, the foundation said, that the people already are straining under a tremendous tax burden and that the combined Federal-State public debt stands at a top-heavy $274,000,m0,000 neither of rvhich augur economic health.

Taking into account the debt, plus lvorsening inflation, and defense spending to which it "sees no end," it lvarned that unless wise fiscal policies are follon'ed, there is no future guarantee "to security holders that they will be repaid in a 'fullvalue' dollar."

While business in 1949 n'as producing at the stupendous rate of $256,000,000,000 a year, nevertheless the inflated dollar would buy only 59 cents rvorth. The cost of living for the moderate income family rvas almost 68/o higher than l0 vears ago.

Since 1933, when the government first came to the aid of depression-hit farmers, it has paid the farmers almost $9,000,000,000 in benefits, this despite the fact the farmers' marketing income jumped from $5,314,000,000 in 1933 to $28,127,000,000 in 1949.

The nation's tax bill-Federal, State and local-rose nearty $40,000,000,000 from 1939 to 1949. The Federal take last year was 68/o of all taxes levied.

Federal, State and local spending more than tripled-from $17,000,000,000 in 1939 to $60,000,000,000 last year when the Federal government alone spent 69/o of the total.

In 1940, there were 4,400,000 civilian employees. By 1950 this had jumped one-third, to 6,400,000.

Military spending in 1939 was only l4/o of. total Federal spending. It was 50/o at mid-1950.

As of Sept. l, this year, 18 States were paying out $2,420,80O,O0O in cash bonuses to war veterans. Their u'elfare bill was at a rate of $642,000,000 and school aid at $1,728,000,0(X).