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Show THE VOICE OF BUSINESS The secret ov Japan's success: low faxes By Richard L. Lesher, Pres., Chamber of Commerce of the United States . Did you know that there is a country whose productivity is 50 percent higher than Japan's? That's right. While we have all read and heard about the phenomenal productivity of the Japanese economy, one nation exceeds Japan Inc. by one-half. Well, come, come you say. Speak up. Where is this economic giant? Is it one of those OPEC countries awash in oil? One of those tiny countries you need a magnifying glass to find on the map? No, the most productive economy in the world is also the largest. It is the United States of America. Despite our troubles, we lead Japan and all other countries in output per worker-productivity. worker-productivity. American agriculture is three times as productive as Japan's. . Our construction industry is twice as pro-i pro-i ductive. Basic manufacturing is 25 per-'. per-'. cent more productive. i Well, then, why all this fuss? Why is i everyone talking so much about Japan? Is all this talk about the Japanese i economic miracle just a myth? No, the strength of Japan's economy . is real enough. While our productivity is higher today, Japan's productivity is growing much more rapidly than America's. During the decade of the 70s, Japan's productivity grew at 7.4 percent each year, America's at only 2.6 percent. At this rate Japan will overtake us by the end of the century. What then is the secret of Japan's rapid growth in productivity and GNP? Quite simply it is low federal spending, reduced marginal tax rates and a government which understands that economic growth comes from a strong and vigorous private sector, not from big government. Sound familiar? It should. In America we call this policy Reaganomics. And while Tip O'Neill and Ted Kennedy are still arguing against lowering the tax burden, and have proposed a budget which would dramatically increase taxes, the Japanese have been demonstrating the truth of supply-side economics for over a generation. Between 1950 and 1974, the Japanese government cut tax rates by roughly 11 percent every year. And what happened? Their economy grew from a gross national na-tional product of $16 billion to over $300 , billion! And as tax rates were falling, the total revenue collection rose to over $63 billion! While the liberal politicians ridicule supply-side economics here in America, the Japanese are laughing too, all the way to the bank. Another factor in Japan's rapid growth is their high level of savings. Japanese save over 22 percent olife disposable income; Americans save ly 6 percent. Should we be surprised to. they are able to invest billions i research and development and thelates technologies? There is no magic here. Congresstase savings and investment heavily and therefore Americans save and investls and less. In Japan there is no capili gains tax and virtually no tax on persoai savings. The Japanese are also frugal ink government spending. While our ledffi ' government is spending over 25 perK of GNP this year, the Japanese gottr. ment spends below 20 percent. Wilte money spent by the government tas more left for the people. We have the largest and most prat tive economy in the world. And we into: to keep it that way. Following World War II, the Japans borrowed a great number of ideas Ire us: the technology for transistor rafc computers and robots. It only seems far that we learn from our Oriental friest that lower tax rates, limited govern spending and less red tape is to prescription for economic growth audit creation. Besides if we remember Jk ; history of the American Revolution-: was our idea in the first place. |