FOREIGN ECONOMIC AND COMMERCIAL POLICY 839

8. Our international accounts will always and inevitably reach a
balance. This might come about in the future by the drastic reduction
of United States exports of goods and services as a consequence of the
rapid tapering off of extraordinary financial assistance. This would
mean acceptance by this country of a low level of international trade
in goods and services, with adverse effects on our domestic and foreign
economic policy objectives. Domestic and foreign production would
be reduced; American exports and foreign imports would fall and
become subject to increasing restrictions designed to safeguard foreign
monetary reserves; sources and markets would be governed less and
less by competition ; standards of living would drop; and employment
abroad and at home, especially in export industries, would suffer. The
economic condition of the rest of the world is still weak. Such a decline
in our foreign trade, which is likely to take place in the absence of
corrective action on our part, is large enough to j eopardize our politi-
cal and security interests in Europe and elsewhere. We therefore must
continue to maintain in the United States a high level of production
and exports. This is necessary both to support our own economy and to
prevent the economies of other countries from being gravely weakened.

4. The degree to which we maintain a high level of exports will
depend chiefly on three elements in the balance of payments: (a) the
extent of assistance which is provided; (0) the flow of public and pri-
vate foreign investment; and (c) the volume of imports of goods and
services into the United States. | |

). The use of extraordinary financial assistance is closely related to
the achievement of our political and security objectives. However, it
is clear that we ultimately must find ways and means whereby the
objectives of maintaining exports can be accomplished on an economic
and self-sustaining basis, by means other than extraordinary financial
assistance. Such assistance constitutes a burden on the taxpayer and
its continuance can only be justified by its close relationship to our
economic, political and security objectives abroad. Under present cir-
cumstances, to slash such expenditures too sharply would clearly im-
peril past progress and risk the waste of expenditures already made.
Furthermore, it would be unrealistic to assume that all extraordinary
foreign assistance can completely disappear within a few years. There
will inevitably continue to exist special situations (e.g., Greece,
Austria, Korea) whose independent survival may depend upon sup-
port from us. In our international dealings, our economic strength is
one of our greatest assets, and we should be ready to use it in the form
of extraordinary assistance even beyond these few cases whenever it
can significantly serve our political and security objectives. Further-
more, assistance programs can also serve to further our economic