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Economists Hit Ford Plan Poor Get Poorer, Rich Get Richer

Economists Hit Ford Plan Poor Get Poorer, Rich Get Richer image Economists Hit Ford Plan Poor Get Poorer, Rich Get Richer image
Parent Issue
Day
18
Month
October
Year
1974
OCR Text

Economists Hit Ford Plan

Poor Get Poorer, Rich Get Richer

President Ford's latest economie proposals are going to increase unemployment among the poor and escalate the financial squeeze on middle income families. At the same time, his plan will further decrease the taxes paid by corporations and wealthy individuals.

 "The current economie trend is the most serious crisis capitalism has experienced in forty years, since the Depression of 30's" said Bruce Steinberg, a member of the local chapter of the Union of Radical Political Economists. "Ford's proposal has been termed as biting the marshmallow."

Behind Steinberg waved a red and white banner proclaiming Whip Imperialism Now, a play on the WIN button displayed by Ford at his press conference announcing his plans for ending the country's economic woes.

Steinberg's comments came out at a panel discussion by local URPE members held on the University of Michigan campus on Wednesday, October 9. Speaking to an overflow crowd in Angell Hall Auditorium B, URPE members explained the teach-in was part of a nationwide effort by by the Union to help people understand the current economie crisis. URPE, which has chapters on numerous college campuses and headquarters in Boston, is made up predominantly of grad students and professors who promote alternative, anticapitalist economic structures.

During the three hour discussion, panelists dealt with inflationary prices, the recessionary trend business is now entering, the erosion of American imperialistic influence abroad, and the inadequacy of Ford's proposals in propping up this failing system.

As business has expanded, more people at every income level are seeking a greater share of the country's wealth. Everyone wants to be at the top level of the impossible American dream, despite the fact that not everyone can attain the money of Nelson Rockefeller.

 "People are demanding a larger share of income than is actually available," said Torn Weisskopf. "Nobody is willing to accept the fact that someone has to lose.

 " According to Weisskopf, the current crisis reflects the tensions which are building as the "economic pie" stops growing. People no longer see themselves as getting ahead, and in fact, must fight to hold on to what they already have.

"People at the bottom can be sustained only by the military or promises for the future," he said, "and there are founded doubts in society now that the economy can deliver in the future."

Since the system depends on economic growth to prevent tensions from inequality, marginal changes such as Ford's proposals won't combat fundamental problems.Thus, the capitalist system may well finally be cracking at the seam.

FORDS BETTER IDEAS

What Ford has proposed to prop up the declining system includes plans for a $10 million surplus in the federal budget by not spending monies allocated for certain programs, a one year, 5 percent surtax on corporate and individual income taxes, and a program of federally funded public service jobs for the unemployed.

 But at each point, Bruce Steinberg pointed out fallacies in these suggested reforms.

 First, by decreasing federal spending, unemployment will rise drastically. Ford acknowledged this, but used the federal job program as an argument against this drawback.

However, the job program only goes into effect once unemployment has reached 6 percent nationally. The Community Improvement Corporation, the name of the job program, will create 200,000 jobs which will be given out first fo those who have already used up unemployment benefits. The only problem is that when total unemployment reaches 6 percent, five million people will be out of work. The small number of jobs will barely touch most of the unemployed.

Ford also suggested a 5 percent surcharge on corporate income taxes, to last for a period of one year. The surcharges will help finance the job program. But he added a proposal for a 10 percent investment credit, which has no time limit. Instead of paying more taxes, the corporations will in reality be paying up to $1/2 billion less.

"Other people will have to pay what the corporations don't," said Steinberg.

Those other people won't be the wealthy either. Although Ford wants a 5 percent surcharge on individual income taxes for people making over $15,000. he also favors a reform in capital gains deductions. This has always been a loophole which can be utilized only by the very rich. Such a reform would reduce income taxes on the rich by 25 to 50 percent. "

 "Ford will tax the middle income people to pay for the CIC." said Steinberg. While the poor people will be hardest hit by unemployment, middle income people will suffer through the surcharge. Ford is asking for unequal sacrifices. Working people foot the bills for monopoly capitalism."

Although URPE does not have a unified position on the best means to change the capitalist system, the panel seemed in agreement that "revolutionary" reforms now could lead to the total desired change later.

Their suggestions included a program of drastic income redistribution, including a guaranteed annual income and a progressive, steeply graduated income tax. Second, they asked for greater public control of corporations. They specifically ruled out simple nationalization, pointing out that such controls merely altered who made the profit from the private capitalist to the federal bureaucracy. They stressed support for union demands, including higher wages, and greater labor control over business. A fourth proposal was for a

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                                     OZONE PARADE

                                                        do you think anyone will show up?

                                                        October 25 * gate 10 * mich. stadium         

     

 Economy continued from page 7

strong freeze on prices, so increased costs would come out of profits, not the consumer's pockets. Fifth, full employment nationally, and sixth, an energy policy based on selective consumption rather than increased environmental degradation (such as would come from nuclear plants or strip mining).

URPE hopes to turn the initial teach-in into a continual group of workshops on alternative economic analysis. People interested in organizing around economic issues should come to a meeting on Tuesday; October 29 in Room 301 of the Economics Building (the white one on the diag) at 8p.m.

- Ellen Hoffman