WHAT PEACE CAN MEAN TO AMERICAN FARMERS 19 



enues as Avell as expenditures. If, for instance, the Federal Govern- 

 ment were to reduce sales taxes in order to increase consumption 

 expenditures, it would be important that the effects of such reduction 

 not be impaired by the States increasing their sales taxes. 



Many other examples of the need for close coordination of fiscal 

 policies could be given, but these are sufficient to indicate an important 

 held in which several major steps could be taken at an early date if 

 public expenditures are to serve most effectively in maintaining em- 

 ployment in the post-war years. Now is the time to do the advance 

 planning. The job should not be postponed until depression has 

 struck. 



In planning for the immediate post-war period, a more or less 

 obvious fact must be recognized ; namely, that the demand for public 

 facilities and services which has accumulated because of wartime 

 restrictions will be almost as urgent, if not as great in volume, as that 

 for other goods. School buildings, roads, and other public properties 

 may be in such need of repair, replacement, and expansion that the 

 public will demand that these things be done, even though the level 

 of employment would remain high if they were not done — or even 

 if public expenditures for these things would be in heavy competition 

 with private expenditures when the labor force is fully employed. 

 This puts a responsibility upon all governments of fully explaining 

 to their citizens the problems involved and of indicating publicly how 

 governmental expenditures can contribute to the pattern of "boom 

 and bust" or to the maintenance of stable employment. The choice 

 is one which should be made with a full and widespread knowledge 

 of the consequences. 



APPROPRIATE TYPES OF PUBLIC EXPENDITURES 



Public action to help private enterprise maintain full employment 

 has been discussed thus far under six headings: (1) Maintenance 

 of farm purchasing power, (2) revision of tax laws, (3) encourage- 

 ment of competition, (4) stimulation of private investment, (5) re- 

 vision of the social security system, and (6) improvement in the 

 timing and coordination of public expenditures. Action on some 

 aspects of all these possibilities is now under way, and some of it has 

 been in process for a long time. None of these suggestions call into 

 use new and untried types of Government activity; and Federal, 

 State, and local governments all have significant roles to play. But 

 the practical possibility remains that the rate of acceleration of 

 actions on these fronts might not be sufficient to avoid the recurrence 

 of mass unemployment in the future. Therefore, the question arises : 

 How and to what extent would it be wise to expand Government 

 expenditures as a means of maintaining full employment ? 



If, despite all possible action of the types thus far suggested, mass 

 unemployment should arise, it would still be possible to' increase 

 governmental expenditures sufficiently to create a full-employment 

 economy. Government expenditures stimulate individual consump- 

 tion indirectly by investment in such public improvements as schools 

 and roads, and directly by such methods as free school lunches and 

 food allotments to low-income groups. The impact of accumulated 

 deferred demand for public expenditures will fall most heavily upon 

 the first of these two categories in the years immediately following 



