Who's Afraid of Peace?

To many a Congressman, massive defense spending is essential to the nation's prosperity. Not so, says a top-level presidential committee that has spent 18 months studying the economic impact of the defense program. The committee's first report, issued last week, concludes: "Even general and complete disarmament would pose no insuperable problems; instead, it would mainly afford opportunities for a better life for our citizens."

Even partial disarmament is a remote prospect. However, thanks to advances in weaponry and more efficient management, defense spending, which in the past decade provided the wages for one in every twelve workers, leveled off last year and thus actually declined in relation to the nation's rising G.N.P. The economy is sufficiently resilient to cope with much sharper cuts in the military budget, by increased federal spending for civilian purposes, by tax reductions or, most likely, by a combination of both.

The committee, headed by Gardner Ackley, who is also Chairman of the President's Council of Economic Advisers, predicted that the nation's G.N.P. will rise from the 1964 level of $629 billion to $870 billion by 1970. Thus, at current tax rates the government will have an extra $50 billion in annual revenue by 1970, even if military spending remains constant. This is the committee's "conservative" estimate. These funds, it recommended, should be pumped back into the economy to prevent recession. Hence the "better life."

The committee acknowledged that "fiscal policies alone cannot prevent problems of local distress and disruption" that accompany shifts in arms spending. Changes in strategic planning, notably the switch from bombers to missiles, have already seriously hurt many industries and localities. Aircraft companies alone abolished nearly 50,000 jobs between 1962 and 1964, largely as a result of declining military demand. In small communities such as Port Clinton, Ohio (pop. 7,000), which stands to lose 2,000 jobs when the Erie Army Depot closes next year, such shifts can be ruinous. The committee therefore urged continued research and government help to soften the impact of changing military technology. This, rather than any likelihood of widespread unemployment as a result of disarmament, is the Administration's principal cutback worry.

This file is automatically generated by a robot program, so reader's discretion is required.