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26. There is no precise level or duration of government expenditures which can be determined in advance, at which an economic system will be seriously damaged from inflationary borrowing on the one hand or from repressive taxation on the other. The higher the level of expenditures, the greater is the need for sound policies and the greater are the dangers of miscalculations and mischance. These dangers are now substantial.

27. The requirements for funds to maintain our national security must thus be considered in the light of these dangers to our economic system, including the danger to industrial productivity necessary to support military programs, arising from excessive levels of total Government spending, taxing and borrowing.

28. Modifications of the foregoing fiscal policies to promote long-term growth may be necessitated for a limited period; (1) to deal with short-term cyclical problems or (2) to achieve overriding national objectives that justify departure from sound fiscal policies.


 * 29. . The national security programs of the United States rest upon the manpower to operate them, the economy to produce the material for them, and the financial resources to pay for them,


 * . The qualified manpower annually coming of military age is adequate to carry out our existing military programs. However, the continuing development of more complicated weapons, machines, and devices used by the military greatly increases the need for military manpower possessed of higher skills, and for their better utilization, and emphasizes the need for expanded technical training and retention of technically trained personnel.


 * . Any considerable increase in the need for military manpower Would require consideration of:


 * (1) Broadening the present criteria governing draft eligibility.

Rh NSC 162/2