To End Stagnation pg. A18  
The new figures on unemployment strongly suggest that the time has come for more drastic-measures to reshape and reinvigorate the national productive effort. Conferences among top Administration officials at the White House indicate that some such measures are being formulated. But if there is to be a genuine rebirth of confidence, without which the slump cannot be arrested, whatever program is being formulated must have some real substance. Mere restatements of the presidential optimism, it is now plain, will not suffice.</br></br>At the same time, it needs to be kept constantly in mind that powerful forces of expansion are still present which, unrestrained, could again lead, quickly to unacceptable inflation. The capacity to build homes, for example, and the need for more housing are as strong as ever and will grow stronger in the decade ahead. The same is true in many other fields. What is required is just enough new incentive to get the ball rolling; what is to be avoided is a slam-bang, crash program that would in a short time require .severe hew restraints to prevent a price runaway.</br></br>If a tax cut should become necessary to trigger a resumption of growth, most assuredly it should contain an automatic repeal provision. Federal spending needs to be increased by several billions annually if urgent defense and domestic needs are to be met. An increase in the 1959 budget goals would also have a considerable tonic effect on the economy. If, later on, it appeared that higher spending was having an inflationary effect, the budget could be restored to balance by a tax increase. For this year and perhaps for the next, however, a deficit would certainly be no cause for alarm.</br></br>As for monetary controls, the Federal Reserve Board ought to encourage further cuts in the rediscount rate at once. Very soon it should case bank reserve requirements if the situation does not improve. These actions arc easily reversible. The very fact that the financial community knows thisÛÓand knows that reversal would come swiftly if requiredÛÓmeans that fairly vigorous actions to case credit restraint are required to induce an actual credit expansion. The two cuts in' the ÛÏFedÛ rediscount rate made since the current recession began last fall have not been strong enough medicine.</br></br>An immediate and determined Administration drive for long-term renewal of the Trade Agreements Act and for a real expansion of foreign economic development aid also would have a useful effect in restoring confidence. The slump in exports is serious and cannot be altogclhcr offsel by any foreseeable expansion of Government or private spending in this country. If the Nation does not act to insure a steadily growing market for its goods overseas, it will inevitably and critically stunt its economic growth. Significantly, those countries which in recent years have outstripped the rate of American economic growth have been nations which, like Germany, the Netherlands and Japan, have been pushing foreign trade to the hilt.