UNCLASSIFIED
Mr. Seribner said he believed it was not feasible to secure
the support of the people for a shelter program. If we want to obtain
the support of, and collect taxes from, all the people, we can't start
with protection for only part of the population. Popular demand would
compel shelter construction in all areas. Shelters would result in a
substantial budgetary deficit unless taxes were increased. Mr. Scribner believed we should not rely on deficit financing in order to get
shelters. If there were a need to help the economy, we should cut
taxes instead of increasing expenditures. Shelters should stand on
their own merits as a defense program, not as an econamy booster.
Dr. Saulnier, Chairman of the Council of Economic Advisers,
seid he wished to discuss three questions:
First, the answer to the
fiscal question of how much deficit depended on a series of assumptions as to GNP, aggregate personal income, Treasury receipts, and so
forth. Every effort to obtain an answer to this question produces a
difference of opinion as to the size of the deficit that would be in-
‘ eurred if a large shelter program were adopted, although there is
' agreement that there would be some deficit. However, this question
is largely academic. If shelters are needed, fiscal considerations
need not prevent their construction.
Secondly, said Dr. Sauinier, with respect to the question
of materiel, it was clear that a shelter program of the magnitude contemplated would put a heavy but not unbearable burden on the construction industry. Materials for shelters could be obtained if a shelter
program were adopted.
Thirdly, from the point of view of anti-recession measures,
Dr. Saulnier believed shelters should never be thought of as a stimlus to the economy. The economy does not need this stimlus; it will
have as much stimulus as it can stand from active defense programs.
The construction industry was close to a full-employment condition,
and shelters would add to its burdens.
The shelter program is long-
range; the economic cycle is short-range. It is therefore impossible
to plan shelters as an anti-recession measure.
In conclusion and summary, Dr. Saulnier said (1) there was
no need for shelters for purely economic reasons, (2) economic considerations need not block a shelter program needed for other than
economic reasons.
Mr. Gray said it might be presmmptuous of him, but he did
not agree with the Budget and Treasury figures. He agreed with Mr.
Scribner that the decision as to shelters should be taken on other
than fiscal grounds. He was not recommending adoption of a shelter
program, but he felt that the Council should come to a conclusion
on the concept of shelter, on commmication to the people, and on
incorporation of shelter in new schools and Federal buildings. On
the latter point, Mr. Gray noted that the new addition to the State
Department building did not include shelters.
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