American Arithmetic
The hopes and fears, rumours and denials, and ups and downs of American foreign economic policy are apt to cause such confusion that it is worth while pointing out that fundamentally it is all a matter of arithmetic. Mr. Dean Acheson has recently estimated that the difference between total United States exports this year and the amount which the rest of the world can pay, by imports into the United States and otherwise, will be about $5,000,000,000. This amounts to rather more than 2 per cent. of the total output of the United States in a year and it will have to be covered by loans and credits. It can be done, but nothing but an extreme ignor- ance of American politics could lead to an assurance that it will be done. Some measure of the resistance of Congress has already been fotind in the opposition to the $400,000,000 grant for aid to Greece and Turkey and the $350,000,000 for post-U.N.R.R.A. relief. Next comes Korea, where the amount involved may be as much as $600,00o,000, with a corresponding increase in the intensity of political discussion. The fact that some of the loans will have the backing of the International Bank for Reconstruction and Development does not alter the fact that most of the money will have to be found in America. Nor does it abate one whit the resistance of those Republicans who have fought a successful election with retrench- ment as a main issue. And above all lies the black cloud of a fall in United States prices and a resort to misguided restrictive measures to avert the ultimate peril of a slump. In this circumstance, as in every other circumstance, the right answer will be a bold policy of expansion, but it will be something of a miracle if a majority of American citizens will assent to that answer, even if the survey of world economic conditions now being carried out by the State Department recommends it.
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