Great No-Debates

February 22, 1960

According to Edwin L. Dale, Jr. on the front page of The New York Times of Feb. 7, “a new ‘great debate’ is raging” in Washington at the luncheon table and over the after-dinner coffee and brandy, and you’d be surprised to learn what it is about. Its “single idea” is that “the basic trouble with American society is that we devote too much of our resources to increasing an already affluent volume of private consumption, and too little to public services of all kinds.” In sum: “There is something wrong with a country that has bigger and better tailfins at the same time that it has a second-best defense posture, a worsening slum problem, dirty rivers and streams, inadequate health services, and wretched underfinancing of education.”

Before we take up the “single idea” we might go once over lightly a few of these detailed charges. Our defense ought to be as adequate as we can make it; but mere spending is not the whole answer. As for health services, both private and public, we are spending more on them than ever before in human history. The same is true of education. If the education of our children is wretched, it is not because we don’t pay enough for it. The real complaint in the foregoing paragraph is that people choose to spend their own money on automobiles instead of on better housing.

STILL MORE SOCIALISM

The single idea of this so-called great debate, to restate it in plainer words, is that we do not have enough socialism and ought to have still more; that annual Federal expenditures at the rate of $96 billion are not enough and ought to be enormously larger; that the tax burden ought to be still more crushing; that it isn’t enough to confiscate up to 91 percent of man’s income, the government ought to grab what is left; that the enormous Federal bureaucracy ought to be still further expanded; that people should not be allowed to spend the money they earn on the things they want, but on the things that the Lippmanns and Galbraiths think is good for them.

Paradoxically, the same people who are assumed to be incompetent individually to know how to spend their earnings are assumed to be competent collectively, as voters, to decide how the incomes of everybody else should be spent.

What a still greater tax burden will do to incentives and to the productivity of enterprise is a question that the welfare-state zealots do not consider. Production, they assume, increases automatically, regardless of incentives, the right of a man to buy what he wants or to keep what he earns, or the rewards to saving, risk- taking, or capital investment.

If Washington dinner parties are toying with the idea of a still deeper plunge into socialism, welfare-statism, bureaucratic rule, spending and taxing, their attention should be called to a few real problems. I suggest that the following subjects for possible great debates are being neglected:

1—The effects of continuous deficit financing and of continuously expanding government spending—particularly on nondefense items.

2—The effect of progressive income taxes rising to 91 percent, of corporate income taxes of 52 percent, and of the capital-gains tax in its present form, in reducing incentives and production and sometimes even reducing revenues.

3—The effect of our foreign-aid program in subsidizing foreign socialism, making enemies rather than friends, upsetting our balance of payments, and bringing increased taxes or deficits at home.

4—The effect of farm price-support subsidies in increasing taxes or bringing deficits, raising the cost of foodstuffs for city workers and rewarding people for not producing.

5—The constantly growing social-security program and our ability to carry the burden.

6—The growth of a huge bureaucracy with a vested interest in perpetuating foreign aid, expanding social security, etc.

7—The uncontrolled power of nationwide labor unions to paralyze industry and force continuous inflationary settlements.

8—The danger under present conditions of retaining the 4¼ percent government-bond-interest ceiling.

9—The threat to our gold reserves.

10—The mounting threat to the integrity of the dollar.