Shapiro warns of federal
deficit; calls for tax hike
The Michigan Daily - Tuesday, May 21, 1985-- Page 3
Tuebingen
d e ates
visit their
By KERY MURAKAMI to worry about it," he said. "I've seen less," said Shapiro, "including the
in the media where people are saying military. The budget proposals don't s
told state legislators yesterdayptr that we've had the deficit for some exert leadership in these areas ."
taxes must be increased in order to years now and that we can live with it. Shapiro noted that almost half the
lower the feera sedefic t. That's wrong." cuts would come from federal sub- Shapiro (ContnudomPage)
lowerthefederalbudgetdeficit. Because Michigan depends on sidies for farmers. "If I were in a ... urges tax increase
"Everybody has to give up some, durable manufacturing - the farming state, I don't know what I'd political party, arrived last Tuesday
said Shapiro, an economist by trade. building of machines - Shapiro said do," Shapiro said. sidered part of the "American way," for a week of tours of Ann Arbor and
"It's a myth that the deficit can be the state would be among the hardest To Shapiro, a tax increase, or a where taxpayers have a hand in the surrounding area.
hit by the deficit. Rising interest rates "broadening of the revenue base;" is deciding who gets the tax dollars. Peter Foutanberg, a member of the
.a.f. Nobody geta away without would also inflate the dollar abroad a necessity. "The American people Shapiro, responding to a question by Eucologicalist Party, said that Ger-
wantiaitax incredseg and hurt trade even more, he said. are willing to pay the costs of modern State Senator Lana Pollack (D-Ann mans don't know enough about
want a tax increase. . SHAPIRO conceded that some cuts government," he said, but the Arbor), said that "no tax increase" America to form valid opinions.
would face political problems, in spending must be made and he problem is a lack of confidence in the proposed by the Reagan Ad- "We can only read the paper and
"ole don'tiantto payroes agreed with the Reagan ad- federal tax system. ministration is actually a "tax shift." look at the TV, and I think that is not
"People don't want to pay more ministration that "it does not have to HE SAID that people feel that the Shapiro explained that by not the real American life we see," said
special urgency sabout it in the state of be made in one year. I'd say we should present tax system is unfair and too providing sufficient funds for Foutanberg.
Michigan" y be cutting at least $50 billion the first complicated. "necessary social programs and by FOUTANBERG, a school teacher,
Sihairo pekngt." d o year and that seems to be the way the Shapiro said that the original tax not incressing taxes would just mean said that he could no longer draw a
committee created by State House administration is moving." system was the simplest. "What that the state and local goverment black and white contrast between the
Speake GarOend DYsati) o He disagreed, however, in the manner the would be simpler than looking on a would have to pick up the slack. This Soviet Union and the United States for
Speaker Gary Owen (D-Ypsilanti) to cuts would be made. "They're going at it chart under how much you earned and would in turn lead to a raising of state his students. "It's difficult for me to
felestit, reicted hat o the upside down," said Shapiro. It was an seeing how much you owed?" Shapiro and local taxes. say the right words because I don't
federal budget, predicted that the enormous irony that the "hawks" for asked, but he conceded that there are ANN ARBOR Mayor Ed Pierce and know enough (words). That's the
nation's economy would grow at a defense are being counter-productive political realities to be considered. George Goodman, executive director reason for me to come here and to see
"substantial but not spectacular 3.5 by seeking further military spending. "You have to understand the social of the Michigan Municipal League, for myself," said Foutanberg.
percent" for at least the next year and "In order to have a credible policies that led to the different tax also testified before the committee. Though the delegation is on a good-
a half. He predicted that Michigan's defense, the most important thing is a exemptions and abatements that have Pierce said the main impact of the will tour, they were critical of U.S.
economy would grow at the same national consensus on the aims of evolved," Shapiro said. "One person's federal cuts would be the loss of about foreign policy under the Reagan ad-
feeral, tae deficit end to society," he said. With this consensus tax exemption is another man's social $1.5 million of revenue-sharing. Pier- ministration.
federal trade deficit threatened to Shapiro said the country would be policy," he said. ce evoked some controversy by "We think we are friends, yes?
"abort the growthmore willing to support the nation's FOR EXAMPLE, he gave the saying that he wouldn't oppose doing said Foutanberg, "and between friends
"If we do not reduce this deficit, it military activities. question of tax exemptions given for away with federal revenue-sharing we must be able to say notonly charm-
will ultimately increase the Sflation "THE SECOND most important making contributions to the Univer- programs if the money would be ing words but also critical words."
said. "If we don't reduce the deficit thing is economics, and the third is an sity. He said that this "very important replaced some other way.
d .e"Ir we will denter into another drecession, adequate military. They're going at in source of income for the University of He said that "revenue sharing just NICK REFERRED TO Reagan's
deeperand wlnger tanteed bees',the reverse order," he said. "Their Michigan" could be considered a doesn't make sense. All it is is a tran- visit to Bitburg and said that the
"IT'S A MYTH that we do not have national strategy is upside down." loophole by some - open only to the sfer of money with some money being German public, though divided i
"Everybody has to take a little rich. But to others, it could be con- lost in the transfer." opinon, tried to understand Reagan's
mniv fn tha iit cnondwill
Bullard unveils state
(ContinuedfromPage1) which divestment would affect direc-
LAWMAKERS said $2.85 billion tly benefit only 70,000 people in South
would have to be taken out of South Africa.
Africa and invested elsewhere. The "We are sacrificing 20-some million
bill would require that to be done over people for the sake of 70,000,"
a five-year period and would require Ngakane said. He said it is not the
the money to be invested in Michigan blacks who will suffer if divestment
firms to the extent possible. occurs.
Bullard said the action makes sense A spokesman for Gov. James Blan-
not only from the standpoint of objec- chard was noncommittal, but he said
ting to South Africa's governing Blanchard has often attacked apar-
system but also because investments theid and wants "not only an effective
in South Africa are risky because of but a fiscally responsible response to
the violent racial tensions there. the problem."
Among those attending a news con- THE spokesman, Tom Scott, also
ference unveiling the legislation was said he does not believe Blanchard is
the Rev. Maurice Ngakane, a weighing General Motors Corp.'s
Lutheran minister from South Africa, decision of where to locate the Saturn
who said divestment "in itself carmaking plant in his consideration
bolsters the oppressed" because they of the issue. GM would be one of the
know that people care. firms that would have to be divested
HE SAID the large, companies under the legislation.
motive for te visit as a goowu
" gesture.
S.A .divestm nt b ll Hut Nick said that a president who
S.A.divestm ent bill is encouraging an arms race that
threatens all civilization "has no
moral right to talk about fascism,
'We view.. .this as a positive way to deal with concentrations, and the free world."
"When I see a soldier's cemetery it
the apartheid in South Africa.' . reminds me of the duty I have to
Rep .VrD De t) prevent war and to make war im-
Rep. Virgil Smith (D-Detroit possible," said Nick. "This is exactly
to the contrary to what our countries
do, yours and mine."
Jim Burchell, an aide for Bullard, South African investments, he expec- NICK SAID that we have learned
said that he doesn't believe the bill is Blanchard to eventually follow suit. nothing from World War II. "Hitler
will have an effect on General Motors' "It's the right thing to do," said Bur- succeeded to kill 50 or 60 million
decision. chell. people," Nick said, "but Ronald
"There are 28 other states where a Burchell said the bill is not intended Reagan and Gorbachev are ready to
decision on divestment is pending" to put pressure on the University to kill three or four billion people any
said Burchell. "If GM wanta to play divest its funds from companies doing day."
that game with Michigan, they're business with South Africa. "It's just Petra Herre, who represents the
going to have to play the game with 28 another step in the continuing Social Democratic Party, said the
other states. They're not going to have struggle to get the state to get its act United States encouraged Germany
any place to go." together," he said. and other European countries to be
Burchell said that like Gov. Mario Daily reporter Kery Murakami more independent, but said that Ger-
Cuomo of New York, who is urging his many cannot identify its security with
state to pull its pension funds out of filed a report for this story. the security of the United States.
"The United States is too far, too
gr t st ee~ttesnofher point of
S"" .vi great a distance,and anothern of
toward buying conditions for vehicles. The pace was slowed at the begin- view. We are near the eastern coun-
Once again, people pointed to lower ning of the year but the survey shows tries.aWe have much more to
interest rates on car loans and lower a resurgence that should continue.
prices as reasons for this improved Although fewer American families saOUTANBE G ALSO talked sout
attitude. expected their financial situation to FOUTd BEmGoALOtaught bot
RECORD LEVELS were registered improve this year, still fewer expec- the dilemma of a country caught bet-
in home buyings and in purchasing of ted financial reversals. ween two superpowers. "Many
household durables. The newfound nations all over the world need an
positive attitude toward buying This outlook for continued economic enemy for its nation to concentrate.
coupled with the continuation of con- growth, the report said, is based on The American government needs the
Sumer confidence has keptue up -the the expectation of no further reduc- Soviet Union as an enemy to enforce a
pacer onfipoeent in kpt thefiacl tions in the upemployment rate and military economy," said Foutanberg,
situation of American families, continued low Pates of inflation. who believes that Germany should
establish a good rapport with all coun-
Survey says
people are
. buying more
(ContinuedfromPagel1)
tended period of time."
At the core of this improvement in
the economic state is the sufficient
improved attitude towards buying
conditions. In the first quarter of this
year record favorable levels were
established, meeting those registered
two years ago.
A key to establishing these record
levels was the turnaround in the auto
industry. Sixty-three percent of
families surveyed were favorable