Lethbridge Herald, The (Newspaper) - November 4, 1970, Lethbridge, Alberta
CONFER IN OTTAWA fsrael Premier Meir is accompanied by Prime Min- ister Trudeau as she walks along the parliamentary corridor In OUawa to his office for talks on the Middle East situation. She left Ottawa Tuesday to return to Israel. Price Controls Argument Warms Up Wodnosday, November 4, 1970 THE LETHBRIDGE HERALD 39 By JOHN MIKA Herald's Oltawa Bureau OTTAWA argument blasted its way into the cabi net's consciousness with Uie FLQ crisis in Quebec wheri over mandatory wage and rampant unemployment con price controls, which has sim- eiered through the past six months of lessening inflation, is beating up again among cabi- net, mandarins and backbench- ers. A few bubbles have surfaced IB public statements during the past fortnight and sources say where decisions is bailing with Qio cauldron are rendered argument as the deflationary drive pushes unemployment up. Strangely, the Quebec crisis which has crowded this argu- ment into the background has generated a powerful push-pull surge towards mandatory con- trols. But even advocates do not regard controls as therapy for treating the economy's ail- ments so comprehensive cul-0 regulations aren't involved. Instead, discussion centres imposition of a temporary go eminent "freeze" on wages an prices in a few key sach as the construction indu a sort of local ana thetic to prevent too rapid spread of painful inflation fe during an emergency emploj ment operation. MAIN QUESTION The mam question to be titled seems to be whether massive money transfusion t revive the economy should pumped in quickly and IT.OS Liberal politicians appear t Wlow the well-known wait for spring, do it slogan. "There is a pretty genera agreement within the govern ment that some really radica efforts to stimulate the eco nomy will have to be made i the unemployment rate past 7 per one source said. "There are a number o tilings under discussion iiiclud ing a hefty works program in volving major deficit finaiicinf in the budget and an immcdi ale increase in the country's money supply. "T hat. of course would re. vive the inflation danger and mandatory controls are one of the things being looked al pret- ty seriously as a means of heading it off until (lie eco- nomy was back an its feet and could lake care of ilsolf. "The next sixty days are critical and will decide what measures will be necessary.1 A host of factors will in- fluence these decisions because the government is faced with, a dilemma in trying to fight in- flation and unemployment nt the same time in so far as it has any choices in tinkering with an economy locked into North American and world con- ditions. Here are some of those fac- tors. An entirely new priority has siderably worse than the na tional average is regarded as a genuine cause of unres that must be met immediately Regional Economic Expan sion Minister Jean Merchant is reported to be strongly urg uig a crash program to pro- duce jobs throughout the coun try but particularly in Quebec and that undoubtedly woulc emphasize construction pro- jects. The Economic Council of Canada's report last month pointed out that only new jobs had been created in Que- in the first of half of this year while the jobless total soared to 10 per cent of the work force. But at the same time, it warned that past experience has shown sudden surges of in- vestment only create serious inflation problems, particularly acute In the construction indus- try where bursts of activity bring high wage demands from workers who know their jobs won't last. The industry passes the In- creases along to customers and the high wage increases become a challenging model for unions in other areas, touching off another inflation- ary bout. The ECC, while stressing un- employment as the pre-eminent current problem, said a grad- ual approach to increasing the economic tempo is essential if :he long-term problem of infla- tion is to be licked. Gradualism was tlw watch- word of recent speeches by lath Finance Minister Edgar Jenson and Bank of Canada jovernor Louis Rasminsky an go on doing so willi a clearer conscience and an in- direct subsidy from the state. The lobby also [cars that the means lest involved in Hie scheme and the fact Hint the poor must claim it themselves will deter the proud anci me ignorant from using it. Then there arc the unomploy- UUVL'lllllltla UIUIUUJJIUU II1VU- IHUIl llnilu lile Ulli sures to deal with this problem. I Here (lie problem is the It is lo introduce, from August a family incomes supple- ment which win pay the poor- est families the difference be- tween tlicir actual income and I the tax threshold, up to a niaxi- I mum of a week. The scheme j is expected tr cost about pounds and to help IW.OOO "wages a device intend- ed to make sure that no one finds it more profitable (o live on social security than to work. If a man who lias beim earn- ing a wage below (he govern- ments poverty line loses his job or falls ill, his social secur- ity payments arc cut off at the families. But already the "pov- level of his former earnings. No erty lobby" in Britain has at- fewer than families are tacfted (he scheme. It points j estimated to be currently af- out that Ihe scheme allows em- j fected by the wages stop. ployers paying wages below I Finally, there are Ihe old age pensioners. Here Hie problem j is thai anyone living entirely on u retirement pension falls; automatically below the gov- ernment's poverty line, lie is eligible for an addilional grant, knmvn us supplementary beuc-> fit, but as it is subject to a means lest and lias lo be claim- i separately trym the penshiri' many people over 500.000 households, according lo one' estimate ore either too proud or too ignorant to claim it. What many would have prc-' tarred would have been an in-1 crease in family allowances.', which are paid ID all families j with young children, and which appear lo be claimed by almost; everyone who is eligible [or (hem. Under III1.1 Labor Govern- ment, family allowances were twice raised on a "claw-back1' basis; corresponding decreases in lax allowances look back Hie increases from wealthier lam- ilies and conccnlralcd il cn- lircly on Uie poor. But it looks as if the Con- servative Sccrctar. of State tor Social Security may be more interested in a negative income lax, a scheme which would make casli granls automatical- ly lo those with incomes below a certain level on a graduated basis, and lax lliose wilh in- comes above. Such a scheme has long been canvassed in academic circles in both Brit- ain and the United Stales. It would fit in well with what seems to he the Conservative philosophy on social services: shift (lie cost from the taxpay- er to tire user. In the long run the Conservatives seem to be saying il will be fairer and cheaper, lo see that the poor man has the money in his pocket (o buy what he needs and llien lo charge everyone for using Ihe social services. Eaton's Canada-Wide Special Semi-Annuai Sale Of Women's Leather Gloves, 2 Colours Looked aj, looked over, but never overlooked, hands gloved in Jeafher make a vila) fashion statement abaur you. 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