Evening star., 1936-05-01
UNCERTA|NTYLA|
TO NEW DEALERS
Bad GuessWork Charged on
Factors Involving Mount.
ing Deficit.
by DAVID LAWRENCE.

BY DAVID LAWRENCE.
Small wonder that the word "un-
certainty" is written large in the
business and financial world today.
For official Washington Is full OF the
same thing.
To begin with the Secretary OF the
Treasury finally confirms what has been
suspected for a long time, namely,
that President Roosevelt was unduly
optimistic when he predicted in a
message to Congress that this year
would be one of receding deficits on
the budget.
Morgenthau comedies that the
deficit will run close to $4,000, 900, 900,
which is a record high for peace
time deficits.
The question of who is TO blame
now enters the controversy. The New
Deal seeks to place the blame for
S2,225 100000 on the soldier bonus
and S500,O00,000 on the Supreme
Court for its. A. A. A. decision, and
the remainder on the relief of un-
employment
The other side of the argument
Is that the soldiers have had S2,225,-
100000, or thereabouts, due them in
1912 and the payment this year is
In the nature of prepayment. The
public debt never did reflect the
contingent liability though Congress
several years ago committed the
country to the expenditure. So the
soldiers alone aren't to blame for
this years deficit, especially since an
overwhelming majority of both Houses
including Republicans, as well as
Democrats. voted for it.
AS for the S5OO,OOO,OOO lost on pro-
cessing taxes, this is the responsibility
of the Neal Deal There was ample
reason all along for believing that
majority of the Supreme Court would
hold to the traditional view on the
matter of the taxing power. Hence,
the enactment of A. A. A. in the face
of precedent was a risk taken by the
New Deal that now has to be paid for.
This leaves the question of why
the deficit in excess of about $3,000,-
100000 is being incurred for the
fourth successive fiscal year of the
Roosevelt administration. The answer
is that the New Deal has spent big
sums in experimenting with the eco
nomic system and has succeeded in
producing unemployment almost as
rapidly as private industry has been
able to absorb large numbers of un-
employed.
A. A. A. Ousted Farm Labor.
Slowly the truth is coming out, for
instance as to the amount of agri-
cultural labor displaced by the A. A.
"A. For as acreage was cut down. many
farm workers were made idle and
forced on relief.
Mr.. Roosevelts contention now and
It is echoed by many Senators on
the Democratic side-is that national
Income has gone up considerably in
the last three years. The President
ia his New York speech said the
national income had risen from $685.
600, ,OO0, 900 in 1882 to SOS 900, 900 900
in 1886.
There is something wrong with
these figures. Apparently some one
snisinformed the President or he has
home figures or calculations never
before revealed to the public. The
Are that the national income amount
ed to $4,000 900 900 in 1882 and the
latest figures are for 1885, which show
about s54,oOo,OOOOOo. Any such
sump in income from S54,O00 900 900
10 s65 5000,000000 would be sensa-
aional, and since the year 1886 is only
about one-quarter through, it is
fnere matter of conjecture what the
1895 national income will look like
anyhow.
I On the basis of the best available
data, the President is deviating from
hitherto accepted data by about SIS
000000,00O in the spread from 1882
to 1886
Tax Ratio Rises.
But the big question is what per-
centage of the national income goes
to the people for their own expendi-
ture and what percentage is paid to
Government in the form of taxes.
The percentage of taxes to national
income has been rising. 1t has gone
from l2.4 per cent in 1929 to 1911
per cent in 1885 and, judging by
the big increases in the form of pay
roll taxes and other levies being i'm
posed by the present Congress and
yet to be imposed in order to bal
ance the budget, the percentage will
rise considerably higher.
Mr.. Roosevelt in effect says: Never
mind about the balanced budget, it
will take care of itself-keep your
eye on the rising national income"
To all this the taxpayer may, in effect,
reply: Keep your eye, Uncle Sam,
on that budget or the amount of taxes
that have to be paid will absorb so
much OF the national income as to
break down the economic mechanism
and force Government control and
focialistic system"
Some day the New Dealers will
ask the taxpayers if they would like
TO go back to Hoover and the answer
may be: Not Hoover, but 1928, when
Coolidge was President" In that
year the national income was s8o,-
OOO,oO0,000 and yet the total cost of
the Federal Government was about
s5,lO0,00o,oO0, so that today the nor
NAL Federal deficit alone amounts
to what it used to cost the Ameri-
can people for government. In other
words, excluding the bonus and the
lost processing taxes. the planned
economy" of the New Deal has re-
suited in a $4,000 ,000, 900 deficit
which. added to the other appropria-
tions OF a spendthrift Congress, gives
the Nation a gross deficit of s6.oOO.-
10000 to reckon with this year.
tCopyright, 1851
RECORD COTTON WEEK