The Washington herald., 1915-02-09
The Increasing Government Deficit.

We regret that it is necessary for us to recur
to subject that we have been compelled to dis
cuss more than once in the last two years, and
that is the steadily increasing deficit in the reve-
nues of the government. But the cause of this
discussion is not OF our own seeking. Each day
makes a larger and larger problem of the matter.
The solution thereof has been postponed time and
again. but this only renders the solution more diff
fcult when at last it can no longer be postponed.
Temporary expedients have been adopted, but
these are only makeshifts. On December I, last,
the government deficit was, approximately, $59,-
100000 The emergency revenue tax then
went into effect but the deficit has increased until
it is now $7o,ooo,ooo. 1t was $I95oo,ooo a year
ago and if it goes at the rate that it has
done and there is not the slightest reason to be-
leve that it will do differently, the deficit for the
fiscal year as a whole will be at least $4,000 ooo
and probably
Most of us remember perfectly well what hap
pcncd twenty years ago, the last time when
there was a government deficit large this.
Then alarm arose, aided by the free silver agita-
,:o@, 4 to the solvency of the government. Green
Lacks presented at the Treasury for redemption in
sold h@d TO be Immediately paid out again by the
Treasury in order to defray current expenses.
Thus the famous endless chain of greenback re-
dcupton began to operate, and the governments
supply OF gold reached the point of exhaustion.
Panic resulted and only stopped by the self
sacrificing efforts of number Of bankers, headed
by the late ]. Pierpont Morgan, who agreed to
place the government in possession of enough gold
to meet necessary demands for the time being.
For reasons with which everybody is familiar,
and to which it is, therefore, needless to advert,
there is little danger that a contingency of this
sort may be regarded again probable, or, per-
haps even possible. But it is possible and prob
able that if the deficit continues to enlarge, the
credit, or any rate the reputation of the gov
crnment will become cloudcd. Steps have no
doubt been taken and will yet be taken by the
various government departments toward effectng
economies. 1t would seem if the greater NUM-
bcr of the bills now mcditated in Congress for
larger national expenditures, such the rivers
and harborS Improvement appropriation, the
ship-purcha>c bill the plan for the gift of $1,000,
600 to small cities and villages in the shape o.
postoficcs, and other cxtravagant and mostly non
scnsical schemes must fall by the wayside. But
there is a certain minimum of national expense
that must be met and the truth is that in great
and growing country like ours this minimum of
national expense constantly rises.
SO far, the methods that have been tried for
meeting the cxigency have been income tax
and an emergency war tax. Departmental
not likely to amount to much; and there is an
exceedingly potent reason, from a political point
of view, why the income tax md the emergency
war tax cannot be appealed to for further help.
The chief why the income tax does not
produce much expected is that
the limit of exemption under the law placed
altogether too high. Nobody is taxed whose
income is not more than $1,000, or, if the income
is that OF a man and wife, more than $4,000. 1t
was a tax conceived in a spirit of selhshness and
prejudice which was designed to rest solely upon
the shoulders of the well-to-do; and these selfish
and unjust designs have been frustrated. An in
come tax to be productive must be honestly and
fairly distributed. Pretty nearly everybody who
has any money at all should be made to share
the burden as is the case in Great Britain and
walls. But the politicians responsible for the
present law know perfectly well that if they amend
the law so as to give it wider scope, they will
never see Washington again, after their present
terms of Office expire except as private individuals.
AS for the war emergency tax, it has become plain
that the money raised by it is it, no way sufficient
to counterbalsnce the growth of the deficit. The
deficit has increased, as we have shown, over
$Io,oooooo since December l. when the emergency
tax was put at work.
1t is useless for the political party now in power
to try to avoid the issue Sooner or later it must