Review of the Book:

Financing Economic Security in the United States
by William Withers

Benjamin W. Burger

[Reprinted from Land and Freedom, January-February 1940]

This volume, by an Economics Professor at Queens College, attempts to survey the problem of economic security in the United States. Its publication could be justified only if it were written with special skill (and it is), with fresh intelligence, and with a sound interpretation of the problem of relief.

In a circular accompanying the book, we learn that another Assistant Professor of Economics, at Columbia University, considers the book "illuminating," and believes that the author "carries his erudition lightly and has written a refreshingly clear and lucid book."

As a factual account of the sorry mess called Federal Relief, Professor Withers treats the subject with reasonable thoroughness. As a study of the causes and cure of the problem, the book is barren and of little value. This is particularly true because of the inexcusable failure of Professor Withers to enlighten his readers on the basic principles of taxation and the profound influence they exert on the problem of unemployment and insecurity. The question arises: can we expect a Professor of Political Economy to give us light, when he himself is in darkness?

Cautiously, he informs us that unemployment is the main cause of economic insecurity. He writes (p. 4):

"In the depths of the depression in the early thirties, probably from fourteen to seventeen million Americans, about one-third of the working population, were unemployed. Even in 1937, when business conditions had markedly improved, unemployment was still estimated at from seven to nine million."

This reviewer would pause here to make a few important observations. For instance, how has the Federal Government attempted to cope with a problem of such magnitude? Has it sought to ascertain the cause of unemployment? Has it any conception of what unemployment really is? Has it ever considered why the Pilgrims who landed here in 1620 never suffered such a problem? Or why savages, today, in darkest Africa know no such problem?

The Federal Government has spent over twenty-five billion dollars since 1930 in its vain efforts to solve the problem.

With what results?

Along with the unsolved employment problem, we are now suffering:

• An unprecedented tax burden.
  
  
• The heaviest national debt in our history.
  
  
• Lack of confidence on the part of the investing public.
  
  
• Continuous antagonism between government and business. It has not dawned on our politicians, and professors of political economy, that taxation, by robbing Peter to give to Paul, never can solve the unemployment problem. If it has, they have given no indication of that fact.

Today, taxes absorb one-fifth of our entire national income! That means that every year, more than 20 per cent of the earnings of the American people are being seized by their government. A recent economic survey showed that as a result of stupid relief measures and heavy taxation, the United States lagged near the end among twenty-three nations trying to recover from the depression of the past ten years.

With so little inducement to work and produce (because the government counts itself in as your partner when you succeed, and forgets all about you when you fail) is it any wonder that business has been steadily folding up and withering away, and the very problem of unemployment relief intensified?

What does Professor Withers suggest for this terrible condition? More taxes! Yes, dear reader, more taxes. By a parity of reasoning may we not fairly assume that he would attempt to cure an opium addict by prescribing more opium?

But let us quote Professor Withers (page 97):

"Under ideal tax systems five billions more of state and of local revenue than were obtained in prosperous years might be secured. It was pointed out earlier that the Federal income-tax system might be improved by broadening the base of the income tax. One or two billion dollars of additional revenue might be secured in this way. Millions might be obtained from reductions in evasions, avoidance, exemption, and unreasonable delinquency. ...The reasoning outlined above leads to the conclusion that Americans are not overtaxed, and that instead, they are badly in need of tax reform. ...

"If the citizens of nations which resemble the United States in wealth and in economic development are paying higher taxes than Americans pay, it is plausible to conclude that American taxes are not too high. If the taxes in other countries are not forcing a crisis in capitalism, it may be that the American economic system could stand higher levies."

This from our colleges and universities! No wonder the man in the street has lost faith in professors of political economy. Such balderdash has compelled producers, strangled by steadily mounting taxation to look elsewhere for an understanding and solution of the problem.

We looked to our colleges for bread, and they offered us a stone.