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Tax-Cut to Bring Prosperity?
Plain Truth Magazine
March 1964
Volume: Vol XXIX, No.3
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Tax-Cut to Bring Prosperity?
Lynn E Torrance   
Church of God

Born: 1918
Died: September 25, 2004
Member Since: 1953

What is the truth about the predicted U.S. economic boom? Is prosperity just around the corner? How long will it last?

   PRESIDENT Johnson and his economic advisors are forecasting a nation-wide economic boom in the months ahead.
   Government economists predict the nation will, in the next year, spend more for luxury goods, more for travel and vacations, more for food, more for housing, more for clothing than in any previous year in our history. That, we are assured, will bring prosperity!
   What's behind this sudden optimism? Is there any real basis for these smiling predictions of national prosperity?

Why Economists Predict Prosperity

   Economists hope that the reduction of income taxes will put more money in the pockets of the average American. It is a foregone conclusion the average American will spend this extra money, if he gets it. Economists assume this increase in spending will cause business to boom through much of 1965.
   But will it?
   This predicted U.S. economic boom is expected to boost the economy of other nations as well. Several nations base their currency on the American dollar. Their prosperity is also at stake! The value of their money rises or falls with the value of the dollar. If the dollar value drops, the value of their currency also drops.
   That is why many astute observers declare the survival of the Free World hinges on continued U.S. prosperity.
   Many world leaders, however, anxiously wonder how long U.S. prosperity will continue. They ask, "Will a U.S. tax-cut really bring lasting financial prosperity?" "Is it possible for taxes to be permanently reduced as long as government spending spirals upward, as is now happening in Britain and the U.S.?"
   This next year is to be a year of apparent prosperity. But this prosperity will be artificial, not real.
   Let's face the plain facts!
   By cutting income taxes, the U.S. is cutting government income. But it is barely cutting government spending.
   Economists estimate that in the next two years the U.S. Government will spend from $15 to $18 billion more than it takes in!
   Some day this spending will have to be paid for!

Will Borrowing Money Bring Prosperity?

   It is incredible that anyone could believe that prosperity can long continue when more is spent than is received as revenue.
   Suppose a family has a net income of $100 a week. They borrow another $100 every week and spend twice as much as their weekly income. Eventually they will run so far into debt they will go bankrupt!
   Such a high-spending family would have to borrow $200 the second week to pay the $100 they borrowed the first week and still have an extra $100 to spend. And that doesn't include interest! They would be forced to borrow $300 the third week, $400 the next, $500 the next, until they would be borrowing thousands! But eventually this high-spending family will run so far into debt that their credit will no longer be good. The money lender will either run out of money to lend, or he will no longer trust this family's ability to pay their debts. This family will no longer be able to borrow money. It will be BANKRUPT!
   A national budget is no different than a family budget. Both work on the same principle. Any nation that spends more than it takes in is ultimately headed for bankruptcy!
   The Government can forestall the "day of doom" longer than an individual can. But the end result will be far more disastrous national bankruptcy! National poverty! A fatal blow to the entire Free World!
   The only possible way the Government can obtain the $15 billion to $18 billion more than it will collect in taxes is either to borrow money or to reduce the value of the dollar by printing dollar bills or their equivalent. There is no other way!
   The result is a corresponding rise in prices inflation. The economy becomes inflated like a balloon!
   This planned inflation could cause the U.S. dollar to lose from 1 to 2 per cent of its purchasing power every year. That is an article which cost $1.00 in 1960 may well cost $1.12 in 1965.
   Higher prices mean it will cost MORE TO LIVE. It will soon cost the average American family so much to live they will have less actual money to spend than they had before a tax -cut took place.
   Not only will higher prices make it more expensive to live, but unless federal spending is stopped, higher taxes will eventually have to be collected from wage-earners to pay for excessive government spending.
   No government is richer than its people. No government can give something away without first taking it from the people in taxes.
   Perhaps the average man in the U.S. and the British Commonwealth of Nations is shocked at the spending policy of his elected officials. Yet he commits THE SAME MISTAKES IN HIS OWN PERSONAL LIFE.
   Economists are hoping this tax-cut will send American consumers on a buying spree to load up on washing machines, color television sets, new automobiles, and new clothing.
   Advertisers are using every "gimmick" known to man in an effort to persuade a gullible public to satisfy their natural lust for material goods with a charge account, credit card, or the "friendly" loan.
   This buy-now-and-pay-later craze has led many wage-earners to borrow more each month than they are able to repay.
   Many families have not only borrowed all they can on the installment plan, but they are borrowing additional money by placing mortgages on their houses.
   They then are spending this borrowed money on such things as vacations, automobiles and college tuition. No wonder so many are having financial difficulties!
   A recent U.S. News & World Report states that the total national and private debt "now exceeds 1.1 trillion dollars." The end of rising debt is nowhere in sight!
   There is no logic under the sun which even remotely supports the foolish theory that either a family or a nation can by borrowing money long continue to spend more than its income.

Unwilling to Change?

   The tragic thing is that the nation as a whole is not willing to admit its mistakes. Instead, signs point to ultimate higher taxes, increased spending, deeper debt both public and private and a continued loss of the gold which backs our currency, culminating in a fantastic financial "bust."
   Unless a drastic national reform takes place, the day is coming when a dollar bill will be as worthless as a piece of old newspaper.
   European leaders have warned the U.S. to put its economic house in order or go broke!
   Dr. Arthur Upgren, professor of economics at MacAlester College in St. Paul, Minnesota, startled a meeting of insurance men, bankers and educators when he said that by 1970 the U.S. will go flat broke. "LOOK OUT FOR THE BIGGEST BUST YOU EVER SAW!" he said.

Depressions Are "Made"

   Let's face the plain facts of economics.
   Everyone the world over recognizes that a farmer can only be truly prosperous when he produces enough crops to bring him a good income and can sell them profitably. Granted, a farmer can, by borrowing money, live high for a time in apparent prosperity, without producing crops, but what will happen when he runs out of borrowed money?
   Why don't statesmen recognize that like a farmer, a nation must produce by hard work if it is to have lasting prosperity?
   Because the hard-working, industrious people of Japan and Germany are outworking, out-producing and out-selling America and Britain, they are rapidly becoming the world's most prosperous nations.
   But our people in Britain and the U.S., instead of working hard, often try to see how little work they can do and still collect a day's wages.
   Labor demands high wages but too often won't put out an honest day's work.
   Secretary of Commerce, Luther Hodges, reported that perplexed businessmen are saying, 'They can't find the people who are willing to give a full day's work!"
   The educator, Dr. Houston Cole of Jacksonville State College, said, "The average American actually works only about 4 hours a day. The rest of the day he 'goofs off'. "
   World observers report that the nations of the world are beginning to feel that the "made in the U.S.A." brand indicates POOR WORKMANSHIP and little durability.
   Are the U.S. and Britain headed for a financial collapse of our own making? Will history repeat itself?

Can It Happen Again?

   On "Black Thursday," October 24, 1929, began the great United States stock market crash.
   Panic swept the entire nation. Banks went broke. Millions lost their life's savings. Thirteen million Americans became unemployed.
   Starving people looked into garbage cans for something to eat. Wide-spread government relief programs became necessary to prevent a nation-wide revolution of starving, unemployed men.
   The nations of the world were shocked to discover their prosperity was tied to U.S. prosperity. World trade slowed to a standstill. Depression and unemployment spread.
   Your Bible clearly reveals that unless the U.S. repents, it shall happen again the only question remaining is "How soon?"
   It is vitally important to realize the economy of the U.S. and Britain could collapse at any time. The stage is set. The warning signals of coming economic disaster are flying.
   Unknown to many American statesmen, the economic health of. America is being undermined by a vicious, secret trade war. Last May, the news analyst Andrew Tully warned, "American business... already has started to fight for its life against European competition."

U.S. Finances Economic War Against Itself

   After World War II the U.S. went deeply into debt in order to give Europe billions. Statesmen foolishly and needlessly gave them currency which could be redeemed with gold.
   Western Europe received 26 billion in economic and military aid. The bankers of Western Europe now hold 21.5 billions of redeemable American dollars. What would happen if they should convert this redeemable currency into gold? It would drain all the gold reserve from the American supply!
   The U.S. has less than 15.5 billion in gold available. And since 12 billion is already pledged by congressional law to back our currency, the U.S. has a little over 3 billion in gold on hand to redeem the 21.5 billion debt held by foreign nations.
   Whenever our competitors in Western Europe feel the "time is ripe," its bankers can throw the entire U.S. economy into complete chaos, and bankrupt our entire nation by suddenly demanding gold for all the dollars to which they hold claim.
   Our gold supply could be dissipated overnight! With no gold to back our paper currency, it would become inflated worthless; our goods priced so high no one could buy them. The U.S. could not carry on trade with any nation because we would have no gold to back our foreign trade arrangements. Our foreign trade, if any, would be reduced to a barter basis.
   World observers recognize the deadly peril. Warren W. Butler, publisher of the Lakewood Herald American, recently said, "Our dollar has never been in such peril for almost a hundred years."
   Even though the stage is all set for the economic collapse of the English-speaking nations the descendants of the ancient House of Israel God will not let the "big bust" come until His work of preaching around the world the gospel of the Kingdom on The WORLD TOMORROW and in The PLAIN TRUTH has been completed.
   Our Creator declares, "This gospel of the kingdom SHALL BE preached in all the world for a witness unto all nations; and then shall the end come" (Matt. 24: 14).
   The truth is shocking! The end of prosperity and of our nation cannot come so long as this work of preaching the gospel of the Kingdom continues.

Why "Big Bust" Will Come

   God has allowed the U.S. and British leaders to make financial blunders which make a national bankruptcy inevitable all because the American people have not obeyed the financial laws God has set in motion.
   In Malachi, the third chapter, God thunders to modern-day Israel our English-speaking lands today: "Will a man rob God? Yet you have robbed Me. But you say, wherein have we robbed Thee? In tithes and offerings. You are cursed with a curse; for you have robbed Me, even this whole nation" (Verses 8, 9).
   Most U.S. wage-earners pay nearly 35% in taxes many of them hidden. Yet if we as a nation acknowledged God to be our Ruler, and obeyed Him, God would let us keep 90% of our income.
   God owns the whole universe. He has reserved for Himself a tithe ever since the creation of the world. This tithe (tenth) belongs to God. God uses this tithe to pay for the publishing of His Gospel to the entire world.
   If our nations had been faithful in paying their tithe to His work, our peoples would never have gotten into such a morass of private and national debt. If our nations trusted God for their protection instead of their former enemies, God would fight our battles and the communist nations of Russia and China would long ago have destroyed each other in a fight to the death.

How You Can Have Prosperity

   We have, as a people, cut ourselves off from the only source that could have given us wisdom to keep out of debt the knowledge of the ways of God as found in the Holy Bible. Our nations and our peoples are staggering under a mountain of rising debt.
   Most people are so far removed from the truth of God they have never even as much as heard that the Eternal Creator set definite LAWS in motion invisible, living laws which regulate our personal economic conditions.
   A KNOWLEDGE of and obedience to these laws would KEEP US OUT OF DEBT and would give us life-long financial security.
   Many of you are right now heavily in debt.
   You are not going to deliver yourselves from this debt until you begin first to pay God what you owe Him. Then He will see that you are able to pay your debts to your fellow men.
   You will never discover that obeying the laws of God brings financial prosperity until you begin to obey them. God, in return, promises you financial blessing.
   Even if the nation as a whole won't repent, you can as an individual repent of disobedience to your Creator.
   God thunders, "Try Me now herewith, saith the Eternal of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it" (Mal. 3:10).
   If you are faithful God promises to prosper you and take you through the coming big "bust."
   But you need to test God, to take God up on His challenge!
   He has promised, "Because thou hast kept the word of My patience, I also will keep thee from the hour of temptation" trial or tribulation "which shall come upon all the world, to try them that dwell upon the earth" (Rev. 3:10).
   You will need God's supernatural PROTECTION when the "Big Bust" comes!
   But God expects your obedience from here on. Whenever the knowledge of God's ways reaches your mind, He holds you accountable!

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Plain Truth MagazineMarch 1964Vol XXIX, No.3
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