WHAT THEY SAY ABOUT RECESSION

Illinois' Democratic Senator PAUL DOUGLAS :

THE quickest and most effective way of dealing with the recession is by means of a tax cut for lower-and middle-income groups, i.e., those groups which tend to spend almost all their income. Such a tax cut would be fed into the economy almost immediately. It would stimulate demand for goods and services, afford the best hope for stopping the current economic recession, and help to start an economic upturn. Public works are too slow. And even if taken off the shelf quickly, and even if built in the right localities, public works generally do not directly employ those who have lost industrial jobs.

Harvard Economics Professor JOHN KENNETH GALBRAITH:

TAX reduction is a rather irrevocable step. Once taxes are reduced, it will be difficult to raise them again. Should the present recession prove temporary, we would want to have them back, and fairly promptly. We can't have a deficit in both depression and boom. Life is not yet that wonderful. There are other reasons for favoring public works. Schools and aid to education, research support and facilities, health facilities, urban rental housing, urban redevelopment, resource development, metropolitan communications, are all deficient or lagging. We should first make jobs building the schools.

Harvard Economics Professor SUMNER SLIGHTER:

TAX cuts would be a mistake. In order to do much good a tax cut would have to take effect within the next two months. Proposals for larger outlays on public works, however meritorious in themselves, are not an effective way of dealing with the recession. Three steps by the Government would be extremely useful. One would be assurance that the Federal Reserve will not revert to its extreme credit policies of

last year. The second step would be an aggressive easing of credit by the Federal Reserve. The third step would be for

the Defense Department to step up its efforts to order now goods it would otherwise order next summer or fall.

Fair Deal Economic Adviser LEON KEYSERLING:

THE argument that we face a mutually exclusive choice between a much bigger federal budget and substantive tax reductions dangerously misreads the plain facts about the current economic situation. We need action along both of these lines.

Columnist DAVID LAWRENCE:

The biggest single incentive that could be applied in America today is in the field of taxation. The current recession and the economic convulsions of our time are directly related to the punitive rates in our tax system.

WASHINGTON POST AND TIMES HERALD :

THE hope now must be that the Government's decisions to advance and expand some of its normal spending program will be sufficient to hold off pressures for abnormal, make-work projects or for drastic tax reductions that might induce curbs on indispensable Federal expenditures.

NEW YORK TIMES:

IT is now clearer that the Government will not permit the present recession to become much worse. In fact, the chief argument is already now primarily one of timing of more massive Government intervention as well as of the form this intervention should take--a tax cut, a sharp increase in public works or a combination of the two. In the last analysis we have now both the weapons and the will to prevent any serious deterioration of the present fundamentally healthy economic situation.

WALL STREET JOURNAL:

YOU may be sure that in their freedom the people will in due time turn the recession around. They will probably do it faster the less they are stuffed with Government "remedies" and the less they hear about Thinking Big. There is only one right approach to taxes, and that is for the Government to reduce its spending enough to permit reductions without unbalancing the budget. What the economy needs far more than a tax holiday is a holiday from Government gimmicks.

Columnist GOULD LINCOLN in the WASHINGTON EVENING STAR:

THERE are two sides to Government deficit spending. It may help the economy in immediate troubles, but it can add to the tax burdens of the people for years to come. Government spending is not the total answer to the present problem. The biggest part of the solution must come from the American people and private industry.

Minnesota's Democrat -Farmer -Labor Representative COYA KNUTSON:

UNCLE SAM is sick. He has a bad case of "depressionitis." He has a pain in his economy and he has jobless fever and chills. The dangerous germ that has brought Uncle Sam to bed is the neglect of the family farm.

NEW YORK HERALD TRIBUNE:

THE recession is taking on the "saucer" shape of 1953-54. The signs grow that we are on the bottom of the saucer, but it may take some time to cross the flat part of the bottom.

Bank of America President S. (for Seth) CLARK BEISE:

I THINK we have come down a rapid descent in business activity but we will saucer off now. We should bottom at midyear and have a fourth quarter turnup in the later months of the year.

Dallas' First National Bank Economist ARTHUR A. SMITH:

IF the injections of Government spending (dope) by Uncle Sam (the doctor) result in strengthening public confidence and in adding push to the private economy (the patient), then the treatment will be proper. Of course, the patient ought to get well enough to go off dope and pay the doctor's bill.

Oakland Industrialist HENRY J. KAISER JR. :

RECESSION? Depression? If you analyze deeper, you'll see we're not going into any decline. We have too great a country; we have too great a future.

New Jersey's Republican SENATOR H. ALEXANDER SMITH:

THE other day I read an interview with a resort hotel operator who claimed he was feeling the effects of the recession. He turned down 500 reservations every weekend last year, he said, but now he is turning down only 400. It is meaningless to talk about recession unless we consider what the economy is receding from, and where it stands in relation to the past. At the present it is receding from the highest peak in our economic history; and even now it remains at a record high, compared to the level of previous years.

Colorado's Republican Senator GORDON ALLOTT:

WHAT is more significant than the absolute number of unemployed is the percentage of the labor force unemployed. Our February unemployment constituted around 7 1/2% of the labor force and about 6 1/2% when adjusted for seasonal variations. This rate is lower than in several months during 1949 and early 1950. And it is, of course, way below the 25% unemployed in 1933, 19% in 1938, and 14.6% in 1940 after eight years of New Deal recovery.

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