Evening star., 1934-10-21
Continued From First Page.)

pay for the emergency expenditures
which may still be made?
In the first place, from fresh United
States Government borrowings. In
the second place, from increased tax
alton. AS indicated above. only about
half of the emergency expenditures is
ever likely to be repaid. The balance
has to come from the purchaser of
Government bonds and from the tax
payers.
The contingent liabilities, amount
Ing to potential $4,000, ,O00, 900.
should not, in theory, ever be payable
by the Federal Government. The
guaranty has been given solely so as
to facilitate placing the bonds during
this time of crisis. The Government
does not become responsible for them
except in case of default. Unfor-
tunately, however, there are indica-
tionS that countless individuals who
have had their mortgages refinanced
by the Government regard their new
debts as Cancelled. They do not feel
obliged to repay Uncle Sam. How
many will actually fail to pay is a
matter of conjecture, but it is safe to
expect that with the passage of the
years the volume Of these contingent
liabilities for which the Government
will be responsible will steadily in
crease. A substantial part of this
$4,000, 100000 will, therefore, ultimate
ly also have to be added to the public
debt.
National Debt Growing.
1t is this debt which gives the meas
ure of the permanent cost of the New
Deal. Other items. like the S1,OO0,-
100000 subsidies of the A. A. A., must
be added to obtain the total cost. But
advances to the r. F. c., which are
repaid, and other similar self -liquidat-
ing projects, cannot rightly be charged
against the cost of the New Deal.
Likewise those assets which the Gov
ernment may possess that are sound
can, at least in part, be set off against
the cost of the New Deal.
But the cold fact remains that
when Mr. Roosevelt took office the
national debt was less than S21 ,O0O.-
100000. 1t was S27 ZOO, 900 900 by the
end of June, 1884. If the present
deficit continues it will be about
S32,0O0,000,000 by the end of the
current fiscal year, or about twice
what it was at the end of the Coolidge
economies. If, as now seems likely,
instead OF the promised balanced
budget for the following year we
have a new deficit of a billion or
more, this deficit will also have to
be added to the public debt. Finally.
rs already indicated, contingent liabili-
ties for which the Government will
ultimately be responsible as a result
of New Deal policies will likewise
in time find their way into the public
debt column.
In fact, politics being what it is. and
politicians finding that it is popular
to spend as much as they can get
hold of for their constituents, there
Is every reason to expect that the
debt by 1886 will be $4,000, 900, 900 to
S35 100000 900, or even more The
permanent cost Of the New Deal by
the end of Mr.. RooseVelt'S first term
Is thus likely to be in the neighbor-
hood of from s12 ,00o, 900 900 to SIS
O00,000,000, without taking account of
such expenses as the A. A. A., which
were met out of current earnings.
What does this mean in terms of
the average taxpayer?
Taxes Increase, of Course.
That upward of a half billion dol
lars a year will have to be added to
our annual tax bill to cover the in
terest charges on this vast new debt.
AS there are in the United States
about 100000 income taxpayers, it
means an average increase of more
than 500 taxpayer year. If more
evenly distributed, it means an in
crease of $50 for every family in
the United States. In the final analy-
sis there Is no way to avoid passing
the buck" to the taxpayers in some
form or other-if not in an increased
income tax, then in a sales tax or
greater inheritance taxes or business
taxes. The Government cannot bor-
row Indefinitely. It must some day
begin balancing with receipts in
stead Of, as at present, spending about
50 for every 50 it receives in taxes
But there is something even more
important than this mere piling up
of dollars and cents which must be
listed as part of the cost of the New
Deal. This is the Tammanyization of
the country under the aStute Mr..
Farley. Government funds have been
poured out with lavish generosity in
States which it was important to
make safe for the Democratic party.
Money has been distributed extreme
ly unevenly. Latest figures, running
only down to Midsummer, show, for
example, that for every So of inter-
nal revenue taxes paid from New
York State only about 50 of Govern
ment beneflts-in the form of P. w.
A., relief work and relief money, etc.