In US economy, some things change while others don’t

In US economy, some things change while others don’t

EDITOR:

Last Monday, I debated the topic, “The Keynesian Economic Theory Is Out of Date With A Modern Global Society” at the Youngstown Torch Club. While researching the subject, I came across the December 1942 issue of Fortune magazine. It had an insert supplement “on potential courses for democratic action” after the war was over, which they were assuming would be another year or two. This insert was “Part III — The Domestic Economy.”

Here are two paragraphs under the heading “Fallacies of debt” that are prescient:

UThe commonest objection to a policy of government spending arises from the fear of public debt. To some extent this fear is grounded in a theoretical misapprehension: that public debt is like private debt, and that if the government continually spends more than its income it will go broke or cause inflation.

U“This analogy is false so long as the productive capacity of the nation is maintained, the debt is internally held, and the government retains its taxing power. For with production flowing, since the interest on the debt is paid to residents of the country, the government can always recover an equivalent sum in taxes, no matter how huge.”

Has the productive capacity of our nation been maintained? No, it has mostly gone to China. Is our debt internally held? No, 30 percent of our national debt is foreign-held, with 48 percent of that held by China, Hong Kong and Japan. Has our government retained its taxing power? Yes, but one out of three isn’t good enough.

This report notes that some economists urged “a fairly drastic redistribution of income from the saving to the consuming class. The ‘propensity to consume’ is highest in the lowest income groups; therefore, for the sake of stability, let us tax the rich and subsidize the poor.” Sound familiar?

DONALD K. ALLEN

Youngstown

A lesson from Lincoln: Give thanks for our blessings

EDITOR:

I love America. Do we still celebrate Thanksgiving and remember God’s faithfulness?

On March 30, 1863, President Abraham Lincoln wrote the following words: “We have been recipients of the choicest bounties of heaven. We have been preserved, these many years, in peace and prosperity. We have grown in numbers, wealth and power, as no other nation has ever grown. But we have forgotten God. We have forgotten the gracious hand which preserved us in peace, and multiplied and enriched and strengthened us; and we have vainly imagined, in the deceitfulness of our hearts, that all these blessings were produced by some superior wisdom and virtue of our own. Intoxicated with unbroken success, we have become too self-sufficient to feel the necessity of redeeming and preserving grace, too proud to pray to the God that made us!”

When we stop thanking God for His provision, we end up forgetting Him altogether.

Wake up, America; 146 years later, this still applies.

ERMA NIEMI

North Lima