The Penn's Grove record., 1923-07-06
SAVING 4 BILLION DOLLARS

Headlines in the public press,
based on speeches recently made by
President Harding and Director of the
Budget Lord, have heralded the state
ment that the administration for the
fiscal veal of 1928 has saved upward
of a billion dollars, creating an I'M
preston that the Savings" is due to
a reduction of expenditures.
A billion is a lot of money TO
save in one year ven by the admins
tration of a great government like
ours, but it is a simple thing when
YOU once understand how it is done.
Anybody with a lead pencil and a
sheet of paper who understands adj
dition and subtraction can do it the
way this administration does it with
one hand tied behind his back. Here
is the formula:
On july 1st, 1922, the United States
Treasury estimates f~orcasted a deficit
Of 1923, 100000 for the fiscal year
1923. On June Is, 1928, the United
States Treasury predicted a surplus
of 5000, 000, 900. Add these together
and YOU have S1,023, 5000, repre-
senting the great "billion dollar saw
ing
Now let us see just how this billion
dollars was saved:
On July LIST, 1922, the Treasury
estimated its receipts for the fiscal
year 1928 at $3,073, 100000. In June,
1928, it revised its estimate OF re
ceipts to read SO 9~30,000,0OO. That IS
to say, the Government receipts Tor
the fiscal year of 1928 are now est-
mated at 1851, 100000 more than or
iginally estimated. These are the
official figures of the Treasury De-
partment.
From these estimates of receipts
alone it will be seen that the so-called
deficit of 1923, 900, 900 was purely an
imaginary deficit. 1t did not exist.
1t was a "straw man." 1t was only a
bad guess.
By comparing the actual receipts
for 1928 with what the Treasury
thought they would be on July 1st,
1922, 1857, 000, 900 of the "billion dol
lar saving is accounted for. OF
course, if the original estimate OF re-
ceipts had been correct the govern
ment could not have saved a cent OF
this 1857, $1,000, and could not have
wiped out an 1928, 100000 deficit, be-
cause no deficit would have been APP
parent.
Now let us see exactly in what
amount the government actually
claims to have reduced expenditures.
The total expenditures for 1928 are
shown to be SO ,795, 302,499. Figures
obtained from the office of the Direc-
tor of the Budget to include the full
fiscal veal of 1923 give the total eN-
penditures for the year at S3,730,00O,-
900, which deducted from the amount
of expenditures for 1922 shows a re-
duction of expenditures for the year
of $6s, 1902 ,499. The army and navy
expenditures alone We're S2O0,O00,-
900, due to reductions following war
activities and preparations for war,
which about equals the amount Of the
predicted surplus, and is greatly IN
excess of the total reduction in eX-
p~enditures of sos ,000, 900, showing
thereby increased expenditures in
some other departments.
Neither the 1851, 100000 mistake
in the estimated receipts nor the re
duction of nearly $500, JOG 900 in
army and navy expenditures is due
to any economy or retrenchment on
the part of the administration. The
latter is due entirely to a readjust-
ment from a wal basis to a peace
basis.
1t should also be noted that in the
statement of receipts, about $780,
900. 900 are recorded as miscellaneous, .
as distinguished from tax revenue.
Most of these are proceeds from the
principal and interest on foreign,
farm loan bonds, railroad securities
and sales of surplus government prop
erty, ETC.; in other words, they are
capital assets of the government
which have been sold or used and the
amount derived therefrom should be
applied to the payment of the bonded
debt. Instead they have been largely
used in part to help wipe out an
imaginary surplus. If they were de
Quoted from the ordinary receipts of
the government and applied in whole
to payments on the bonded debt, the
administration would show q deficit
at the end of the fiscal year 1923
much larger than the predicted sur
plus.
When the fiscal year of 1923 Is COM
pleted, an analysis of the details of
receipts and expenditures will show,
Notwithstanding some minor econo-
mics brought about by the budget
system, which was of Democratic
origin, that there has been no sub
s~tantial economy or retrenchment on
the part of the administration, and
that the predicted surplus of $780,
600. 900 is an imaginary surplus, ar
at by juggling figures, just as
the 1929, 000, 900 deficit was a purely
deficit due to a big mistake
in Understanding government re-