Page Two

THE MICHIGAN DAILY

Friday, February 28, 1975

Page~Two THE MICHIGAN DAILY Friday, February 28, 1975


Gay Academic Union
OF
The University of Michigan
PRESENTS
MIDWEST SPRING CONFERENCE
A CALL TO ACTION
MARC H 7-8--9, 1975.
Rackhdm School of Graduate Studies
University of Michican, Ann Arbor, Michigan
KEYNOTE SPEAKERS
! ELAINE NOBLE-Massachusetts
State Representative
t ALLEN SPEAR-Minnesota
State Senator
* Workshops-Social Activities
GAY ACADEMIC UNION--325 Michigon Union
Ann Arbor, Michigan 48104-(313) 763-4186

Govt. forecasts gloomy future,

(Continued from Page 1)
only a modest gain in slackened
trading. But brokers expect a
continued upward trend amid
decreasing interest rates and
speculation the Federal Reserve
may soon announce another re-
duction in the rate it charges
on loans to member commer-
cial banks.
The Federal Communications
Commission said it will approve
$365 million in an annual rate
increase for AT&T and said it
will hold hearings later on re-
quest for an additional increase.
AT&T's original request was
for $717 million increases that
would have raised charges for
long-distance calls an average
of 7.2 per c e n t effective
March 4.
Congressional Democrats rec-
ommended an energy package
yesterday that includes a 5-
cents-a-gallon increase in gaso-
line taxes.
THE PACKAGE calls for a
graduated tax on new automo-
biles that get sub-normal 'nile-
age and a rebate on new cars

that get better than average
mileage. It also recommends
c r e a t i o n of an independent
board to decide future policies.
The Labor Department report-
ed yesterday that unemploy-
ment checks were paid to about
217,000 additional jobless pe-
sons during the week ending
Feb. 8, and 38 states reported
increases in t ht eirunempby-
ment rolls. A total of 5.9 million
people were receiving benefits
as of that date, the department
said.
In some good news for con-

sumers, the J.C. Penney Co. an-
nounced a reduction in the re-
tail cost of some of its men's
clothing because of reductions
in the wholesale costs of thosea
items.
AND NATIONAL Airlines an-'
nounced a plan to slash fares
by up to 35 per cent for pas-
sengers who agree to give up
free food and drinks under a
"no frills" plan that will begin
on an experimental basis April
14 if it is approved by the Civil
Aeronautics Board.

PIRGIM reports state
investing in outstate business

House votes end to
oil depletion shelter

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to Advertise in The Daily!

it, n n n n n nogwoom 01 1 -1111==CM .. n on in n n -a n

(Continued from Page1)
U.S. law since 1926 and has been
a prime target of reformers who
claim it is an undue privilege
for one industry.
OIL companies have said the
allowance i' needed to encour-
age exploration for new re-
serves.
If the Senate goes along with
repeal of the oil depletion al-
lowance, oil companies would be
forced to pay about $2.5 billion
in taxes this year that they
otherwise would have saved.
The House defeated a series

of attempts to weaken the oil
depletion repeal. On a key 216-
197 vote,. the House killed a
move to allow independent oil
companies to retain the deple-
tion allowance on the first 3,000
barrels of production daily.
Earlier in the day Congres-
sional Democrats, under strong.
pressure from President Ford,
unveiled their program to save
energy through a five-cent a
gallon tax on gasoline and crea-
tion of a new agency to lead the
United States away from de-
pendency on foreign oil.

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t113:3-

(Continued from Page 1)
Michigan's General Fund and
is held for long periods of time
to earn dividends capable of
meeting pension needs.
Accordinghto Richard Conlin,
author of the PIRGIM report,
the state suffers by investing in
non-Michiganrcorporations be-
cause "it loses the jobs that
could be created here, it loses
the tax revenues those jobs
would generate, and as a re-
suit it increases welfare and
social service costs."
CONLIN added that the Treas-
ury's handling of the trust funds
has "in general been prudent,"
but that it has resulted in some
sizable stock market losses.
His report notes that, by No-
vember 30, 1974, the trust fund
investments in common stocks
had lost $127 million, or about a
third of the amount originally
invested. Conlin said, however,
that this figure was probably
less now due to the recent up-
surge of the stock market.
The report also claims that
the trust money has been get-
ting only a small rate of return,
about five per cent over the
last several years. "That rate
could be achieved by putting
the money in savings accounts,"
it says.
THE DIFFERENCE between
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the present investment policies!
of the Treasury and those ad-j
vocated by the report amounts
to a difference in philosophy,
Conlin said.
Theireportcalls for the ''af-
firmative" use of the trust
funds. It proposes that the funds
be used first to buy into Michi-
gan firms to help them expand
and create new jobs, and, sec-
ond, to require that firms wish-
ing to make uses of this money
have satisfactory equal oppor-.
tunity programs.
PIRGIM will introduce a bill
into the State Legislature next
month whichewould put this
plan into effect, according to
Conlin.
The bill would set up a com-
mittee to administer the pro-
gram. The committee would
consist of the director of the
Department of Commerce and
six citizens representative of the
population, who would be chos-
en by the governor and approv-
ed by the Senate, Conlin said. I
"THE USES this plan makes;
of the $2.5 billion in trust funds,
and of the quarter-a-billion dol-
lars a year that is added to the:
funds, is enough to make a
significant difference in Michi-
gan's economy," Conlin said.

Besides strengthening Michi-
gan businesses, the PIRGIM re-
port suggests that the trust
money could also be used to
fund from ten to 15 thousand
badly needed housing units in
Michigan. Conlin said the earn-
ings from such an enterprise
would be between nine and ten
per cent.
Some $338 million of the trust
funds is$currently invested in
mortgages. But less than 20
per cent of this money is in
Michigan holdings. The rest has
gone to such places as Tucson,
Las Vegas and San Juan, Puer-
to Rico, according to the report.
CARROLL Newton, the Chief
Deputy State Treasurer, said
the Treasury Department will
"vigorously oppose" the PIR-
GIM legislation.
"The function of the Treasury
department is to maximize the
return on trust fund invest-
ments. The legislature has the
prerogative of dealing with so-
cial benefits," Newton said.
He also said Conlin's figures
on the rate of return of trust
fund stocks were wrong. "Our
returns have been slightly over
six per cent. Some of the stocks
were brought at a discount, and
others were bought years ago.

U

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Special During Spring Break
MARCH 1-8

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DAILY OFFICIAL BULLETIN

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OPEN 1 P.M.--MICHIGAN UNION

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Friday, February 2s
Day Calendar
WUOM: Jeff Cohen, Assassina-
tion Information Bureau, "Decade
of Dirty Tricks," 10:05 am.
Women in Natural Resources. 1536
SNR, noon.
Pendleton Ctr.: Open hearth ex-
tra, David Di Chiera, dir., Detroit's
Music Hall, "Bernstein's Mass,"
Pendleton Ctr., Union, noon.
Educ. Media Ctr.: Antonia, Schor-
ling Aud., SEB, noon.
Computer Inform., Control: Moshe
Zakai, "A Lower Bound on the
Estimation Error for Certain Diffu-
sion Processes," 3513 E. Eng., 4
pm.
Hockey: UM vs. MSU, Yost Ice
Arena, 7:30 pm.
Int'l Div., I. M. Sports: Badmin-
ton, volleyball, tennis, jogging, table
tennis, Barbour, Waterman Gym,
7:30-10:30 pm.
Int'l Folk Dance: Barbour Gym,
8:15 pm.


ADVERTISEMENT

of

T here ,s no.
such thing as a
free lunch."
It's a dull term, but something called the
"public debt" has been piling up for years
because our tax dollars haven't come close to
paying for all of the services and programs we've
been demanding. In fact, just the annual
interest charge on this debt recently hit a cool
$29 billion. Nevertheless, many politicians say,
"Relax, Uncle Sam can simply print the money
to cover the cost." Not so, as this story from
The March Reader's Digest makes clear. For
with skyrocketing prices people stopped
buying. And now we've got recession. How to
get out of the mess? Read on ...

THE
'SECRE
TA X'
AMERI
CAN']
AFFOR
 VER wonder
feel poorer eve
you're probab
ing more mo
your fathe
dreamed of? You finally bo
house. You drive a nice ca
you're making payments
boat you always wanted.
did that new tile in the kit
so much more than youe
Why did the bill for that

Government spending that
keeps on even after it has used
all your tax money is a major
force driving up the p rice of every-
thing from hamburger to houses.
Only you can make it stop
machine service call take your breath
away? W~hy do expenses now seem
to exceed income?
There is an easy one-word answer
to all these questions-inflation. But
do we really understand what infla-
tion is, and why this "secret tax"
keeps chipping away at our pay-
checks?
Many factors have exacerbated
this dollar-dissolving inflation-the
energy crisis, crop prices, exces-
sie and ill-advised government
regulation, wages outrunning pro-
ductivity. But the basic cause of In-
flation is one that most Americans
seem largely unaware of: spending
money that hasn't been earned yet.
why you In short, inflation is the creature
en though of debt, and the most inflationary
bly mak- kind of debt is the one we-under
iney than our democratic system-are the
e r ever most responsible for: the public debt.
ught that The oflicials we elect run up this
r. Maybe debt to provide the loans, goods,
on that services and programs that we have
But why come to believe should be "paid for
.chen cost by government."
expected? We forget, of course, that "paid for
washing- by government" means paid for by



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Music School: Chamber Choir,
Thos. Hilbish, conductor, Hill Aud.,
S8 pm.;degree recital; Leon Brooks,
clarinet doctoral, Fecital Hall, 8 pm.
Career Planning & Placement
3200 SAB, 764-7460 or 764-7465
Wednesday, March 13, 1975
Recruiting on campus: Roose-
velt University Lawyer's Assistant
Program - Seniors interested in
paralegal training. Helpione - Mon-
roe County Community Mental
Health Ctr. Education Coordinator-
Cordinate and superv. Community
Education and Outreach program
for a substance abuse agency agen-
cy - B's in Psych, Soc., Soc. Wk. or
related degree: and Johnson &
Johnsono - Production Manage-
ment position.
Paid position for graduate stu-
dents at Iowa St. as Residence Hall
Advisor: at., meals, and $261 for
academic yr. Deadline April 15.
Write 1220 Wallace - Wilson Com-
mons, Ames, IA 50010.
Undergraduate Students Interest-
ed in emotionally disturbed chil-
dren - tralneeships and summer
camp counselor Jobs with Devereux
Foundation in 7 states. Write Dr.
Henry Platt, Devon, PA 19333.
Montessori Teacher Araining Pro-
gram June 16 - Aug. 1 in Drayton
Plains, MI., for college graduates -
tuition $775. Also a winter program
including internship, $1250.
THE MICHIGAN DAILY
Volume LXXXV, No. 125
Friday, February 28, 1975
is edited and managed by students
at the University of Michigan. News
'phone 764-0562. Second class postage
paid at Ann Arbor. Michigan 48106.
Published d a I l y Tuesdaythrough
Sunday morning during the Univer-
sity year at 420 Maynard Street, Ann
IArbor, Michigan 48104. Subscription
rates: $10 by carrier (campus area);
$11 local mail (Michigan and Ohio);
U12 non-local mail (other states and
foreign).
Summer session published Tues-
Subscription rates: $5.50 by carrier
(campusarea : $6.00 local mail
(Michigan and Ohio); $6.50 non-
local mall (other states and foreign).
day through Saturday morning.
DR. PAUL USLAN
Optometrist
Full Contact Lens Service
Visual Examinations
548 Church 663-2476
UM STYLISTS
at the UNION
Open
Regular Hours
During
Spring Break


C

RENTABEETLE
2016 PACKARD RD.
ANN ARBOR
994_9300

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us. Government may print money,
but this is only the symbol of wealth.
Real wealth is the value of the goods
and services produced by working
men and women. It is their pay for
making cars, houses, clothes, books,
furniture and all the other myriad
things we are accustomed to. Gov-
ernment depends upon this wealth
that we create, and takes from each
of us a portion of it through taxes
and other revenues.
Last year we paid out $255.4 bil-
lion in federal taxes. Unfortunately,
the government not only spent all
this money; it kept right on spend-
ing, doling out $3.5 billion more than
we gave it. And it has generally
done the same for years-spending
$66.8 billion more than income in
the five years 1970 through 1974
alone.
That is where the trouble starts
-when we, as electors, allow gov-
ernment, often for individually per-
suasive reasons, to spend dollars it
doesn't have. It goes into debt.
But government and the average
citizen go into debt under different
rules. Government is the dominant
borrower in the market, both from
individuals (mainly through selling
savings bonds) and by depositing
IOUs with banks, then writing
checks against them. Result: We tax-

ADVERTISEMENT
government incurs after our tax
money has run out. We pay by shell-
ing out that secret tax that adds ten
cents to a pound of bacon, $j to a
pair of shoes, $20 to an electric stove.
Now this is the part of inflation
that most of us don't fully under-
stand: How the government's in-
debtedness pushes up the prices of
the things we buy.
It works this way: We can't print
money to cover our own debts. The
federal government, however, can;
through a complex procedure called
"monetary policy," the Federal Re-
serve creates dollars and transfers
them to banks. The banks make
loans from these new "assets." Thus,
money is "pumped into the econo-
my"-money that was originally
nothing more than the figures on a
Federal Reserve check; soon more
currency has to be printed to cover
the new dollars. Many of these dol-
lars originate through bank loans of
various kinds. They find their way
into the economy through various
commercial transactions. But who
has established the need for these
new dollars in the first place? We
have-through the many things we
ask government to "do" for us;
through loans and grants to busi-
nesses, schools, research groups;
through "aid" programs of all kinds.

oldest of economic laws takes effect.
With more money around than
available goods, prices rise-and in-
flation is upon us.
Okay. Everybody talks about it.
Almost everybody feels it. But what
can we do about it?
Certainly, increased productivity
-each of us producing more for the
dollars we earn-is one of the most
effective counters to inflation. Many
businesses and dedicated workers
have performed amazing feats of
productivity, enabling them to in-
crease their wages and profits while
cutting the price of their products to
remain competitive.*
But productivity increases cannot
indefinitely make, up for the steady
cheapening of the dollar brought on
by the government indulging legis-
lative whims with more "thin air"
money. It's time for some tough de-
cisions in Washington. Decisions
that will not be made unless citizens
-businessmen, farmers, workers,
housewives, pensioners-demand
them and are willing to accept the
sacrifices that must be made.
Particularly in times such as these,
no one would deny the use of federal
resources to take care of the truly
needy. And to alleviate the rigors
of recession, job programs and other
relief may well be essential. Bit

ADVERTISEMENT
be kept under control so we do not
wind up compounding the inflation
which brought about the recession
in the first place.
If we expect government to cut
spending, however, we must all
caut our expectations of government.
Businessmen seeking special treat-
ment to pull them out of a hole dug
by their own inefficiency must make
do with their own resourcefulness.
Special-interest groups must stop
and consider the overall effects of
their requests upon government, and
thus upon inflation. Citizens must
realize that government installations
may close in their area. Because the
money is not available, certain non-
essential programs may have to be
delayed or even discarded.
We, all of us, are trying to hold the
line on spending at home, and we
should expect government to do the
same. We only fool ourselves if we
think real progress can be made
without getting the government's
fiscal engine back in tune.
And remember, we are the gov-
ernment. That's whv we can do
something about inflation-if we
have the sense to discipline ourselves
and the ingenuity to get more out of
the considerable human and materi-
al resources we already have.

jww . 1' ''71

1~

ooLeys




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TGIF
lank God It's Friday
Today
id every Friday
Hot Dogs
WHILE THEY LAST
every Mon. & Tues. ji
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