The Bismarck tribune., 1934-12-20
INCOME BOOST IS
HELD ANSWER TO
BUDGET PROBLEM
Economist Reviews Theories on
Which Various Arguments
Arc Based
By COILS STOCKING
Department Of Economies
New Y0rk University

WITHIN 8 lew weeks the preSlQenL
will submit his annual budget mes
sage to congress. Since our national
debt has been increasing at an ex-
tremely rapid rate during the past few
years the matter Of budget making
has become q question OF more than
casual concern. The atmosphere IS
already fraught with sharply con-
flicting opinions and public discord.
The critics, both carping and sympa-
thetic, are tuning up for the medley
Of controversy which will probably
reach a crescendo about the time the
budget is presented.
Many critics, dominated by .
bookkeeping philosophy, refer to the
federal balance sheet and insist that
the growing deficit is prilna facie
evidence Of gross governmental ex-
travagance. More sympathetic critics
attempt to refute such a claim BY
an analysis Of the items and by
pointing out the fact that much OF
the governments indebtedness IS
more than compensated for by an
increase in the earning assets owned
by the government. They also call
attention to the amount and sound |
ness OF the securities received IN re-
turn for loans which the government
has extended to worthy private en-
terprises In need Of assistance.
Stress Social Values
There are still other critics who in
sist that what they call social values"
should be considered above all other |
questions in connection with govern
mental expenditures. They point to
the thwarted hopes and shattered
lives Of an enormous proportion OF
the citizenry and maintain that no
advanced nation can reasonably and
safely desert its unfortunates during |
q period Of critical need. Such
critics reject the contention that
business confidence must be restored
II such confidence Is to be purchased
only at the price Of denying the hopes
Of those who have gained q new
lease on life tccause of governmental
generosity.
Irrespective Of the pros and cons
there Is little possibility Of govern
mental expenditures being seriously |
curtailed In the near future. And
in spite Of possible revisions Of taxes
it Is inevitable that much Of the funds |
employed will be derived from bor-
rowing operations. This means that
for some time yet to come We may
expect our national debt to continue |
to grow.
At present our national debt, ex-
cluding the profits derived from gold
devaluation, amounts roughly tol
$50. .000, ,O0o. 900. Many people regard
this as an enormous sum. Yet re-
view Of the daily market quotations |
uf government securities emphati.
cally refutes the contention that gov
ernment credit Is being impaired. At
the present time some issues Of q.
8. treasury notes are quoted at price
to yield less than one per cent. and
only . few government bonds are
quoted ct . price to yield as much
- three per cent or more.
Britain d Comparison
BY the way Of comparison Great
Britain has had . national debt Of
approximately $4,000, 100000 for the
last IS years. sum which makes
our high total, reached in the fifth
year Of the worst depression We have
ever experienced. seem small indeed.
During the period in which we
have accumulated q ten billion dollar
increase in our national debt. our ma
tional income has fallen from approx
imately IS billion. to IS billion dol
lars. II eventually anything resembling
prosperity Is restored, the increase OF
our national income for q single year
would easily exceed the whole OF our
national debt.
Confronted as we have been dur
Ing the past few years with steadily
increasing governmental expendi-
lures and simultaneously decreasing
social income, we have right, or bet
ter, an obligation to seriously con-
slider the consequences. At the same
time we should not allow our con.
cern to distort our perspective. The
fact Is that In spite Of adversely our
national debt stu represents only
. small fraction Of our total national
wealth. With q substantial and gen
eral increase in income the present
querulous question Of "how are We
going to pay the bill?" will be con-
vincingly answered.