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- | Welcome once again as MIT professor Paul Samuelson | 0:02 |
discusses the current economic scene. | 0:04 | |
This biweekly series is produced | 0:07 | |
by Instructional Dynamics Incorporated, | 0:08 | |
and was recorded June 19th, 1972. | 0:11 | |
- | The question that I've been asked most in recent weeks | 0:15 |
is about McGovern's economics. | 0:17 | |
Apparently, there's a great deal of concern in Wall Street | 0:22 | |
as McGovern moves closer toward getting | 0:26 | |
the necessary majority of delegates in the Convention. | 0:30 | |
He's taken, of course, more seriously as a candidate. | 0:34 | |
And there is even a view in Wall Street that at the moment | 0:38 | |
we're having a McGovern stock market, | 0:43 | |
namely, the weakness in Wall Street | 0:45 | |
is due to the fact that McGovern is an unsound fellow | 0:48 | |
and he's about to be nominated by one of our large parties | 0:51 | |
and that this is a bad thing for stocks. | 0:55 | |
Now you may say, what kind of a adverse market is this | 0:57 | |
since the Dow Jones averages and the comprehensive averages | 1:02 | |
of stocks have not gone down very much, | 1:05 | |
but when you say that, you'll be told in Wall Street | 1:08 | |
that the market is very low considering | 1:12 | |
the strength in the economy. | 1:16 | |
There's been a lot of good news on the GNP front | 1:18 | |
in the last couple of months, | 1:21 | |
and yet the stock market has not forged ahead. | 1:23 | |
Therefore, it is said an explanation is needed, | 1:26 | |
and one of the explanations, which is only too readily given | 1:29 | |
is that this is a McGovern market, | 1:32 | |
that is concern over the wild man | 1:34 | |
from the plains of South Dakota that must be invoked | 1:37 | |
to explain that the stock prices are as stable | 1:41 | |
and as low as they have been. | 1:46 | |
Well, let me do my best. | 1:48 | |
In the first place, most people do not know | 1:53 | |
who are McGovern's economic advisors. | 1:56 | |
Typically, there are a top drawer | 2:00 | |
of Democratic economist advisors. | 2:04 | |
You all know their names, Walter Heller, Arthur Okun, | 2:07 | |
Otto Eckstein, James Tobin, Robert Solow, myself, | 2:13 | |
Charlie Schultze of Brookings Institution, | 2:20 | |
Joseph Pechman of Brookings Institution. | 2:23 | |
These are the names that have been associated in the past | 2:26 | |
with Democratic candidates. | 2:30 | |
There's no shortage of such advisors, as a matter of fact, | 2:32 | |
it is the Republican Party which tends to | 2:36 | |
run a bit on the short side, | 2:37 | |
when it comes to manning the barricades | 2:39 | |
of an administration. | 2:41 | |
This, because, over a period of 40 years | 2:44 | |
in which the Democrats have largely been in office, | 2:47 | |
the academic economics fraternity | 2:51 | |
has become more and more committed to | 2:54 | |
and associated with, in the eyes of the public, | 2:57 | |
the Democratic Party. | 2:59 | |
Now, those are not names that have been associated | 3:01 | |
in the past with Senator McGovern's campaign. | 3:05 | |
Actually, Arthur Okun, Otto Eckstein, Joseph Pechman, | 3:10 | |
that particular orthodoxy among the Democratic economists | 3:15 | |
tended, I think, first to be informal advisors | 3:19 | |
to Senator Muskie. | 3:24 | |
Senator Muskie was a centrist candidate, | 3:26 | |
they thought he was going to win. | 3:28 | |
Such people always like a winner. | 3:30 | |
They were advisors to him. | 3:32 | |
Well, they picked the wrong horse, | 3:36 | |
as it seems to have turned out, | 3:39 | |
unless we have a surprise awaiting us at the Convention | 3:41 | |
and I don't wish to prejudge | 3:43 | |
what the chances are for McGovern, | 3:47 | |
I'm simply going along with the odds in the same way | 3:50 | |
that the people who are concerned in Wall Street | 3:52 | |
are going along with the odds. | 3:55 | |
Nature abhors a vacuum, | 3:57 | |
and if those economic advisors are not available | 3:59 | |
to a Senator McGovern, then you may be sure | 4:02 | |
there's no shortage of somebody | 4:05 | |
who will be available to advise him. | 4:07 | |
And so his number one economic advisor | 4:09 | |
has been my colleague, a very good friend of mine, | 4:12 | |
Edwin Kuh. | 4:16 | |
If you're writing down in the list of the McGovern people, | 4:18 | |
the single most important one | 4:22 | |
in coordinating academic advice has been Edwin Kuh. | 4:24 | |
His distinction, his special expertness, | 4:29 | |
has been in the field of econometrics, | 4:33 | |
he teaches econometrics at MIT. | 4:35 | |
He's well-known as the joint author | 4:39 | |
on the distinguished Harvard Press book, | 4:41 | |
with John Meyer, who's the president | 4:46 | |
of the National Bureau of Economic Research, | 4:49 | |
but I remind you that this is | 4:51 | |
the new National Bureau of Economic Research, | 4:52 | |
rather than the older Wesley Mitchell, | 4:54 | |
Arthur Burns National Bureau. | 4:58 | |
He's associated with John Meyer as a co-author | 5:01 | |
on a fundamental study on investment demand. | 5:04 | |
He has made studies of productivity and the American economy | 5:07 | |
and he's contributed to the methodology of econometrics. | 5:11 | |
He is the number one. | 5:16 | |
Second, a young colleague of mine, Lester Thurow. | 5:17 | |
If you don't know that name, | 5:22 | |
it's a name you're gonna hear about more. | 5:24 | |
He's a very active, vigorous, young economist, | 5:26 | |
he's about 32. | 5:29 | |
Ed Kuh is younger than the Hellers and Okuns, | 5:30 | |
but he would be in his middle forties. | 5:36 | |
Mark Roberts at Harvard, | 5:44 | |
who's in the field of industrial organization, | 5:45 | |
he would be also be in his late twenties | 5:47 | |
or in his early thirties. | 5:49 | |
And then as an older, elder statesman, | 5:53 | |
you have two men from Harvard, John Kenneth Galbraith, | 5:57 | |
a name I don't have to explain here, | 6:01 | |
also Wassily Leontief, the distinguished input-output | 6:03 | |
pioneer from Harvard University. | 6:10 | |
Professor Leontief is an exception to the rule | 6:13 | |
that as a person becomes older, as a professor becomes older | 6:16 | |
he becomes more conservative. | 6:20 | |
He is supposed to, according to legend, | 6:22 | |
sow the wild oats of radicalism when he's young | 6:24 | |
and then he sobers down as he grows older. | 6:27 | |
Well, Professor Leontief, an old teacher of mine | 6:30 | |
is a counterexample to this rule, he's become more liberal, | 6:34 | |
more liberal, I guess I'll stand at that, | 6:39 | |
as he has grown older, | 6:43 | |
he's been very much against the Vietnam War, | 6:45 | |
and you don't find quite as many 65-year-old professors | 6:47 | |
as you do 35-year-old professors | 6:50 | |
who burn with indignation about the morality of that war, | 6:52 | |
and also about the political desirability | 6:57 | |
and the economic desirability of such a war. | 7:02 | |
Finally, though, I should not fail to mention | 7:06 | |
that among the young advisors | 7:09 | |
are some other MIT people, | 7:14 | |
William Branson, | 7:20 | |
a name you've heard me mention in connection | 7:21 | |
with econometric estimates on how the Smithsonian Agreement | 7:23 | |
will improve our balance of payments, he's now at Princeton. | 7:26 | |
Ray Fair, who is at Princeton | 7:30 | |
and who is developing a reputation | 7:33 | |
as a business cycle forecaster is on the team. | 7:35 | |
On the female side, Heather Ross, who's a MIT PhD | 7:38 | |
and who has worked on the poverty program, programs | 7:43 | |
is an advisor. | 7:47 | |
And finally, the very distinguished James Tobin, | 7:49 | |
who was on the Kennedy Council of Economic Advisors, | 7:53 | |
is one of McGovern's advisors. | 7:57 | |
Now, I will make a prediction, | 8:00 | |
namely, if Senator McGovern does receive the nomination, | 8:02 | |
the carpetbaggers, people more or less like myself, | 8:07 | |
like Walter Heller, like Charlie Schultze, | 8:11 | |
will become available to him in some degree. | 8:13 | |
I don't speak for myself, | 8:17 | |
I'm not bucking for any advisory offices, | 8:19 | |
quite the contrary, but people like to be effective | 8:23 | |
and they like to make their advice available | 8:27 | |
to somebody who's in a position to effect policy. | 8:30 | |
So, in a sense, the first McGovern team, the originals, | 8:34 | |
the most loyal ones who were with McGovern | 8:39 | |
before New Hampshire, before he had a chance, | 8:42 | |
they naturally have been the most important, | 8:46 | |
they naturally will continue to be the most important, | 8:49 | |
but you will finally begin to see infiltrating | 8:52 | |
the group of less young, | 8:55 | |
more centrist, Democratic candidates. | 9:00 | |
And if you're a Wall Street person, | 9:04 | |
you should keep this in mind. | 9:06 | |
But let's stick in the beginning | 9:08 | |
to the original McGovern team, | 9:11 | |
because this is a team that has helped to get as far | 9:14 | |
as he has been able to go, and it is their ideology, | 9:18 | |
of which I find Wall Street is most interested in. | 9:23 | |
Now when I say Wall Street, | 9:28 | |
I mean business groups generally. | 9:29 | |
I know that Lester Thurow and Ed Kuh | 9:33 | |
have had the number of requests to speak to business groups | 9:38 | |
mount astronomically, double and redouble. | 9:42 | |
And I know from my own mail, | 9:47 | |
that many of the business groups who ask me | 9:49 | |
to lecture to them, | 9:53 | |
and unfortunately I'm able to lecture | 9:54 | |
to only a very small fraction of those who ask me, | 9:56 | |
one of the questions that they do direct to me is, | 10:00 | |
who's Ed Kuh? | 10:03 | |
Who's Lester Thurow? | 10:04 | |
What kind of pitches is McGovern likely to send | 10:05 | |
from the mound as he helps shape the Democratic platform, | 10:12 | |
as he perhaps becomes the next president. | 10:17 | |
And so, it's the ideology of the real McGovern, | 10:21 | |
before he has modified his views | 10:25 | |
in the interest of feasibility, | 10:28 | |
before he has soft-pedaled some of his more extreme views | 10:29 | |
in the interest of getting elected, | 10:34 | |
which interest these groups. | 10:35 | |
First, some of you may have read in the National Review | 10:41 | |
a calculation showing that 150 billion dollars or more | 10:44 | |
of programs have been suggested by Senator McGovern. | 10:51 | |
Indeed, there is a notion throughout the land | 10:55 | |
that this is populism out of control, | 10:58 | |
that there is no two plus two equals four sense | 11:01 | |
to the McGovern program. | 11:05 | |
Let me try to, as best I can, | 11:08 | |
to comment on what merit there is in this. | 11:11 | |
If you look in the congressional record, | 11:16 | |
there was put in the congressional record | 11:18 | |
by Senator Proxmire, | 11:20 | |
a statement of the tax program of Senator McGovern, | 11:22 | |
and I shall be quoting from memory from it. | 11:28 | |
First, Senator McGovern has stated that he takes | 11:33 | |
very seriously the problem of inheritance taxation. | 11:36 | |
Now there's nothing radical in this, | 11:41 | |
we have been accustomed to heavy inheritance taxation, | 11:44 | |
at least since the Lloyd George government in Britain | 11:48 | |
of 1909 and 1911. | 11:52 | |
In this country, we have had on the statutory books, | 11:55 | |
the letter of the law, | 12:00 | |
highly graduated progressive income taxes | 12:02 | |
for quite a number of years. | 12:05 | |
But it's also no secret that there are tremendous leaks | 12:07 | |
in our present system of estate taxation. | 12:12 | |
You can have an estate if you're a married person | 12:17 | |
of up to $120,000 and not pay | 12:19 | |
any taxes under income splitting, | 12:21 | |
that immediately halve the rates. | 12:23 | |
You're allowed to give away your money, | 12:26 | |
if you do it judiciously, for example, | 12:28 | |
you and your wife can give away $6000 every year | 12:32 | |
to any one person, that means, if like myself, | 12:36 | |
you have six children, | 12:41 | |
you have can give away $36,000 a year. | 12:43 | |
After 10 or 20 years of that, | 12:46 | |
that's probably going to take care of any modest estate. | 12:49 | |
But that's not all. | 12:53 | |
There are various trust arrangements which are possible | 12:54 | |
and which do minimize inheritance taxation. | 12:59 | |
So, it's a fair statement to say, | 13:03 | |
and this is as true of Britain as it is of the United States | 13:05 | |
that there are 30 11 ways | 13:09 | |
for low, | 13:14 | |
for middle-income people, | 13:17 | |
people with estates from $100,000 to a million dollars, say, | 13:19 | |
to practically escape a death taxation. | 13:24 | |
So, there is news, when Senator McGovern says | 13:29 | |
that he takes seriously the problem of estate taxation, | 13:34 | |
of death taxation, or as he calls it, inheritance taxation. | 13:38 | |
What he would propose, | 13:42 | |
and now this is from the congressional record, | 13:43 | |
this is one of the more concrete of the McGovern proposals, | 13:46 | |
what he would propose is that every person | 13:49 | |
who receives any bequest at any time in his life | 13:53 | |
be taxed cumulatively on the bequest he's received. | 13:57 | |
Gifts, I think, would be included. | 14:01 | |
So, you're allowed to receive a small gift | 14:04 | |
or a small bequest and the tax rate would be zero | 14:07 | |
because of exemptions, or would be very modest | 14:11 | |
because it starts out in a gentle way. | 14:13 | |
But after three of your uncles have died | 14:16 | |
and each one's left you $100,000, | 14:19 | |
you're gonna pay more on the third inheritance | 14:21 | |
than on the first. | 14:25 | |
The graduated rates actually go up, | 14:29 | |
as I remember it, to 77%. | 14:31 | |
Now, that means that a very wealthy person | 14:35 | |
would still be left with about a quarter | 14:37 | |
of what was bequeathed to him, | 14:39 | |
and I don't think that in terms of incentives | 14:43 | |
that very many decisions throughout life | 14:47 | |
of whether I will work nights, whether I work hard, | 14:50 | |
whether I will take risks will be very much affected | 14:54 | |
by the prospect that when I come to die, | 14:58 | |
always a date that people tend to push into the background, | 15:02 | |
I will have to realize that my heirs | 15:08 | |
will be taxed cumulatively | 15:10 | |
on what they receive from me. | 15:12 | |
The importance of this, I think, | 15:16 | |
is in its long-range effects upon the concentration | 15:18 | |
of wealth in the United States, | 15:23 | |
and you don't have to be very radical to have believed | 15:26 | |
for more than half a century | 15:30 | |
that whatever you do about current taxation, | 15:32 | |
that to keep wealth from becoming ever more concentrated | 15:36 | |
as in certain past European patterns, | 15:41 | |
it's a good thing at death to have rather heavy | 15:45 | |
redistributive taxation and to get rid of the loopholes. | 15:49 | |
Well, this is the first part of Senator McGovern's program. | 15:52 | |
On this part of his program, I'll give you my opinion | 15:58 | |
as to whether it constitutes good or bad | 16:02 | |
scientific economics, | 16:06 | |
I'll give you my opinion in terms of value judgements, | 16:07 | |
but as in all parts of the program, | 16:11 | |
I shall also tell you whether I think it's really feasible, | 16:14 | |
whether it's very likely in the present milieu | 16:18 | |
of the United States political situation to be passed. | 16:21 | |
And so, let me then on the estate inheritance tax aspect | 16:26 | |
simply say that the effects upon incentives are there, | 16:32 | |
they tend to be minimal, | 16:38 | |
and no nation, no economy, no society, | 16:41 | |
has ever been ruined by heavy estates taxation. | 16:46 | |
The few societies in which there's been | 16:52 | |
heavy estates taxation have found that there were | 16:55 | |
a lot of other things to worry about. | 16:58 | |
Now, in terms of value judgements, | 17:00 | |
all you need to be in favor of heavy inheritance taxation | 17:02 | |
is a belief in the desirability of, | 17:07 | |
no concentrated elites, rapid circulation of the elite, | 17:13 | |
even if you believe that a person within his own lifetime | 17:18 | |
is entitled to the fruits of the extra energy | 17:21 | |
and extra risks that she has taken, | 17:24 | |
then you have to be quite a believer in laissez-faire | 17:27 | |
to be against death taxation. | 17:30 | |
However, plausible as the case for inheritance taxes | 17:35 | |
must be, I would like to point out | 17:41 | |
that it is always being emasculated | 17:44 | |
in practice by legislatures. | 17:48 | |
It's been said cynically that the typical congressman | 17:51 | |
leaves an estate of $150,000, | 17:55 | |
and that's why up to 120, $150,000, | 17:58 | |
there's almost no tax payable, | 18:02 | |
that the typical congressman is always thinking | 18:04 | |
of his own position and generalizing to that. | 18:06 | |
If that's so, since congressmen are not at the median | 18:09 | |
of the income distribution in the pyramid of wealth, | 18:14 | |
they're certainly protecting a lot of us | 18:17 | |
who get the free ride along with them. | 18:20 | |
And I want to point out to you | 18:22 | |
that even if Senator McGovern were nominated, | 18:24 | |
even if he is elected, | 18:29 | |
it is his party, the Democratic Party, | 18:32 | |
which has legislated all the loopholes | 18:34 | |
in the present inheritance and estate tax code, | 18:36 | |
and I think it'll be quite a day before you get | 18:42 | |
Chairman Mills of the House Ways and Means Committee, | 18:46 | |
doing the dictate of President McGovern, | 18:49 | |
and I would not, if I were a person contemplating my will, | 18:54 | |
make a very big change in my life pattern | 19:03 | |
because of a rational fear that Senator McGovern | 19:08 | |
is going to punitively tax inheritances. | 19:13 | |
Well, that's point number one, inheritance taxes. | 19:18 | |
Point number two is loopholes. | 19:22 | |
There's nothing new about loopholes, | 19:27 | |
we have a total income tax base, | 19:30 | |
we have a total income base, | 19:34 | |
which is much, much larger than the total base | 19:36 | |
that is subject to a taxation. | 19:41 | |
If you were to tax all of the 800 billion dollars | 19:44 | |
of personal income and you were gonna raise | 19:49 | |
just the 100 billion dollars, | 19:56 | |
which we do raise from personal income taxes, | 19:58 | |
you could be down to a 12% tax rate. | 20:00 | |
Now, as you know, marginal tax rates go up a lot higher | 20:05 | |
than a 12%, they go up on personal earned income now, | 20:09 | |
up to 50%. | 20:13 | |
And on dividend and non-wage income, | 20:14 | |
they go up to 70% and they still don't raise enough revenue | 20:22 | |
to balance our budget or even, at times, | 20:28 | |
to balance our budget on a full employment basis. | 20:31 | |
The reason is that the actual income of the country | 20:35 | |
is shot through with exemptions and exceptions | 20:40 | |
for tax purposes. | 20:43 | |
We get a allowance, | 20:47 | |
a deduction for charitable contributions, | 20:49 | |
even if they're only nominal. | 20:52 | |
The value of the housing, when we own our own house | 20:54 | |
is not taxed as it is taxed in England. | 20:58 | |
We get all kinds of deductions for our mortgage interest. | 21:01 | |
This is without regard to the more sensational items | 21:06 | |
such as percentage depletion. | 21:11 | |
I think that Senator McGovern, | 21:14 | |
when he wants to move in on these various exemptions, | 21:16 | |
is gonna find a tremendous resistance. | 21:19 | |
Just think of the sermons you will hear on Sundays | 21:23 | |
if he proposes, as some of his advisors will tell him to, | 21:27 | |
that unless you give more than 3% of your money to charity | 21:32 | |
you shouldn't be allowed to get a deduction at all. | 21:35 | |
Every minister in the land is going to be against that, | 21:37 | |
that's what happened in the early 1960s, | 21:40 | |
when under President Kennedy, | 21:42 | |
we tried to close up some of these loopholes. | 21:44 | |
So, I would sleep fairly easy in my bed at night | 21:46 | |
on these matters. | 21:49 | |
But the big item, I think, is capital gains. | 21:52 | |
Senator McGovern has said that he hopes | 21:56 | |
to treat all capital gains, | 22:00 | |
whether they're long or whether they're short, | 22:02 | |
as taxable like ordinary income. | 22:04 | |
This would make a very big difference to investment behavior | 22:08 | |
and I think that if it were likely to take place soon, | 22:14 | |
it would be a rational reason for Wall Street, | 22:19 | |
given its kind of selfish concerns, | 22:22 | |
to try to take account of it. | 22:25 | |
I will simply say that I've watched the movement | 22:29 | |
for a reform of capital gains taxation | 22:36 | |
for a long, long time, | 22:39 | |
and that the resistances in Congress | 22:41 | |
and outside of Congress are very great. | 22:44 | |
I myself would be hopeful that we've arrived at a time | 22:47 | |
when, at death, the capital gains in my estate, | 22:52 | |
which now under present law escape all taxation forever, | 22:56 | |
as I pass it to my heirs, | 23:01 | |
that at least at the occasion of death, | 23:03 | |
there would have to be a settling up | 23:06 | |
and a paying of whatever tax rate, | 23:08 | |
25%, 35% under the present law, at that time, | 23:13 | |
and that if this took place, | 23:17 | |
it would have a lot of good effects. | 23:19 | |
It would, for example, not lock in elderly gentlemen | 23:21 | |
in that General Motors stock which they bought | 23:24 | |
40 years ago and which they have a tremendous profit | 23:27 | |
in which, to tell the truth, | 23:29 | |
they really can hardly afford to sell now, | 23:31 | |
given the present capital gains law. | 23:34 | |
But if they knew that their estate would be taxed | 23:37 | |
the moment they die, they would not be locked in, | 23:40 | |
and I think this would be a very good and important reform | 23:42 | |
and I think it's a feasible reform, | 23:46 | |
but it's not one which ought | 23:48 | |
to keep Wall Street from sleeping at night | 23:49 | |
or send the Dow Jones averages down by 10 points. | 23:53 | |
Finally, the most important part | 23:58 | |
of the whole McGovern program is his negative income tax. | 24:00 | |
This is what has given rise to the myths | 24:06 | |
about budget out of control | 24:09 | |
to the hundreds of billions of dollars of numbers | 24:11 | |
that are tossed around in conservative circles. | 24:13 | |
What Senator McGovern has done is to take seriously | 24:16 | |
what President Nixon has also proposed to a degree, | 24:20 | |
the negative income tax. | 24:24 | |
The negative income tax, as you know, | 24:25 | |
has been supported by both conservatives | 24:27 | |
like Professor Milton Friedman, | 24:30 | |
and liberals like Professor James Tobin. | 24:32 | |
In a nutshell, when you're below a certain level of income, | 24:36 | |
you will receive money from the government | 24:41 | |
depending upon how much you are below, | 24:44 | |
and when you're above a certain level of income, | 24:46 | |
you'll be paying money out to the government, | 24:48 | |
according to your ability to pay progressive rates. | 24:51 | |
Under the McGovern proposal, every person, | 24:57 | |
this would include, say, David Rockefeller, | 25:02 | |
would receive $1000 of income, | 25:04 | |
and for 210 million people, | 25:09 | |
that's a 210 billion-dollar program. | 25:12 | |
But remember that David Rockefeller | 25:14 | |
doesn't receive this in currency, | 25:17 | |
he receives it as a credit on his tax, | 25:19 | |
but then when his other income is added in | 25:22 | |
he must pay a tax on it, and so most of it is taken back. | 25:25 | |
There is no great swishing amounts of money. | 25:28 | |
To make a long story short, | 25:31 | |
the McGovern program is not a program | 25:33 | |
of a know-nothing type, | 25:36 | |
it's not ill-conceived, the arithmetic is tidy. | 25:38 | |
It does mean, however, a serious attempt to do something | 25:43 | |
about poverty at the bottom | 25:46 | |
in the form of minimum income maintenance. | 25:48 | |
It tries to do so in a way that will give people | 25:51 | |
incentives to get extra earnings. | 25:54 | |
It's the working poor who are important, | 25:57 | |
not just the unemployed poor who are important, | 25:58 | |
and what it means is that all of us, | 26:01 | |
up to about 12 to $15,000 of income | 26:05 | |
would be better off under the McGovern program | 26:08 | |
and all of us, and that's a smaller number of us, | 26:11 | |
who have incomes above $15,000 of income would be worse off. | 26:14 | |
It could mean that people in the bracket, let's say, | 26:19 | |
a very well-paid full professor | 26:24 | |
is getting $30,000 of income. | 26:25 | |
He might find that of that last dollar of income | 26:28 | |
that he received, he'd be paying out something like 60%. | 26:30 | |
I don't think it means he'll retire early, | 26:34 | |
I don't think it means he'll go fishing, | 26:36 | |
I don't think the effects upon the incentives of the country | 26:37 | |
will be even detectable at the macro-level, | 26:41 | |
because they work in both directions, | 26:44 | |
both to make him work more because he needs more now | 26:47 | |
to have money left over for his old age, | 26:50 | |
but it also tends to make him work less | 26:52 | |
and these are rather self-canceling. | 26:54 | |
Let me summarize then by saying | 26:57 | |
that Wall Street is right and Main Street would be right | 27:00 | |
to watch the McGovern program, | 27:05 | |
it's a new thing in American politics, | 27:06 | |
it's a movement towards greater egalitarianism. | 27:10 | |
It is and will be a well thought-out program | 27:12 | |
and it'll be for the electorate to decide, | 27:17 | |
but let me also say that as a non-political expert, | 27:19 | |
Senator McGovern has not yet got the nomination, | 27:24 | |
and when he gets the nomination, | 27:26 | |
that will lead quite a number of Democrats | 27:28 | |
who voted for Humphrey to vote for Nixon | 27:31 | |
so that McGovern does not yet have the presidency. | 27:34 | |
His hope must be that young people who are given the vote | 27:38 | |
in greater degree than ever before | 27:43 | |
do register and do come out and vote for him | 27:45 | |
to offset those who leave his campaign | 27:48 | |
because of egalitarianism. | 27:50 | |
In other words, egalitarianism works two ways, | 27:52 | |
it makes friends for you but it also loses friends. | 27:54 | |
- | If you have any comments or questions | 27:57 |
for Professor Samuelson, | 27:58 | |
address them to Instructional Dynamics Incorporated, | 28:00 | |
166 East Superior Street, Chicago, Illinois, 60611. | 28:03 |
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