The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-01-30
National Debt Reaches Record High

piled liabilities total another $1,000
100000 or so. Painting the blacklist
side of the picture, Ii Is seen that IL
times go utterly bad, If these actual
and implied liabilities have to be met
and If Mr.. Morgenthau's worst fears
are realized, the national debt might
reach $40,OOO,0O0,00O or $45,000,000,-
600 or even more.
There are some intangibles on the
asset side, too. There is about $4,-
473,OOO,0O0 which the government may
realize from equities IL all the debtors
to RFC and Hole pay up. There is
$2,OO0.OOO,00O (not an intangible but
a real ASSET of gold profit" now be-
ing held in the sterilization fund; Sec
rotary Morgenthau year and half
ago announced that this sum would
eventually be turned into revenues and
would contribute toward reducing the
national debt. It Is barely possible
that $1,OOO,OOO,OOO will be collected
from the $4,000 100000 Of war debts.
At some time In the future revenues
from the Social Security act passed in
August, 1885, may be reckoned on the
asset side.
No administration in history has
borrowed so much money as the pres
ent one. No administration has bor-
rowed it so cheaply, either. The cost
of carrying a debt of $4,000, 100000
today is little more than the cost of
carrying the 21,0OO000,000 of 1888,
and is actually less than the cost of
carrying the war debt of 1919. While
the debt has risen 20 per cent since
the 1881 fiscal year, the cost of carry
ing it has risen only "a per cent. This
is what the President was referring to
in his budget message when he said
that the governments credit was never
higher.
Refunding Debt cheapIy.
If the low rates for money continue,
and economists right now can see little
reason that they shouldn't, the govern.
ment will find itself getting out from
under the great part of the debt "dirt
cheap" since about One-half of 1t ma
lures within the next five years. Re-
funding should be possible at low
cost.
One evil of "cheap money" is the
temptation to spend more. 1t en-
courages irrespOnsibility. The world
holds plenty of precedent to show that
it is budgetary trresponsibility that
leads to imitation.
The New Deal-rightly or wrongly
has allowed the national debt to grow
to it's record high in a gamble on re-
covery. 1t has added new taxes, but
declares itself as unwilling to add
more Except for eXtra-budgetary
spending on such things as the
soldiers bOnus). The theory is that as
times get better and incomes increase,
tax receipts will increase and "emer-
gency" spending will end (for as bust
ness get better more people will go
back to work), and the budget will bal
ance, the deficit becoming surplus
going toward the payment of the debt.
The estimated S5,564,0OO,OO0 In rev.
enues for the 1887 fiscal year. if it
proves accurate, would mean the larg-
est federal tax receipts in history,
with the exception of the year 1920,
when wartime taxes were at their
height, but incomes were up, too. How
some of the tax rates have been in
creased to make up for the difference
in income today is readily seen: Max
imum surtax on personal incomes has
grown from 20 per cent in 1929-30 to
IS per cent; the maximum rate on es-
tate taxes from 20 per cent to 20 per
cent, and the maximum corporate in
come tax from IL per cent to 1917
per cent.
All Purchases Reflect Tax.
There has actually been decline in
the amount of federal tax taken from
the citizens dollar, however. In 1882