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<br />interesting and probably catastrophic. <br /> <br />The originators of the proposed discount rate also suggest <br /> <br />that the opportunity rate is based in part on the alleged fact that <br /> <br />the federal government foregoes tax revenues when it competes with <br /> <br />the private market to build water resource projects. It has long <br /> <br />been my understanding that the federal government taxes the interest <br /> <br />which is received by investors on government securities. No weight <br /> <br />apparently was given to this fact, nor the fact that water resource <br /> <br />projects in themselves generate considerable tax revenues, or, in <br /> <br />the case of flood control projects, reduce tax deductions by reducing <br /> <br />casualty losses. <br /> <br />I realize that these criticisms of the proposed discount <br /> <br />rate may not be accurate. Those of us who live in the real world <br /> <br />sometimes find it difficult to adjust our thinking to the Olympian <br /> <br />world of abstract economics. Nevertheless, the proposed rate smells <br /> <br />more like a device to prevent further water resource development in <br /> <br />this country than it does to promote the welfare of its citizens. <br /> <br />a welfare based to a major extent on the use of water and the <br /> <br />prevention of water-caused disasters. <br /> <br />In the event the proposed discount rate is not sufficient <br /> <br />to destroy federal participation in water resource development, <br /> <br />the five year construction start requirement can be used to admin- <br /> <br />ister the coup de grace. As we read the proposed principles, <br /> <br />-5- <br />