Evening star., 1937-04-21

self in hot water with his stockholders.
Mr.. Roosevelt's most serious error is
that he estimates the receipts too high,
or else he figures his expenses too low.
In either event, he winds up the year
with a different set Of figures than he
starts out with.
Heretofore, various excuses have
saved the administration from the
criticism of its own friends. First 1t
was the Supreme Court decision in
validating the A. A. A. processing tax,
or else 1t was the passage Of the bonus
over the veto, or, in another instance,
1t was the alleged impossibility of de-
pending ON private business to absorb
the unemployed, which was given as
the reason for more relief expense.
Confesses Estimates in Error.
Today Mr.. Roosevelt stands before
the country confessing that the esti-
mates he made as late as last January
were in error. He has no excuse to
offer this time except that tax receipts
are not up to expectations. 1t is a
tragic thing that President like Mr..
Roosevelt, who has the best intentions
in the world should be forced to make
estimates that do not pan out. 1t
shows that the people around the
President are too inclined to hide
from him the true story of the de-
pressing effects of the adminiStra-
tions own policies on the business
situation and are too prone to give
him rosy estimates of what a tax
,,{n !,
are enamored Of some new tax device.
Giving the American people f1uctu-
ating data on their fiscal affairs is
q dangerous thing, even though the
making of accurate estimates is
necessarily traught with considerable
difficulty. First, Mr.. Roosevelt told
Congress and the public that the
budget would be balanced in June,
1886. Then he changed it to 1887.
Later he promised Congress he would
bring the budget into balance in 1898.
And now he has virtually moved it
up to the fiscal year 1889.
The effect of a series of miscalcu-
lations might be to break down con-
fidence in the Governments own
ability ever to balance the budget,
and this in turn could have q pro-
found effect on the purchasing power
of the dollar. AS confidence in budget
balancing diminishes the price of
goods In terms of the dollar tends
to rise. This Is an imitation spiral
which comes out Of state of mind
buttressed by continuing red-ink
line.
More Than Miscalculation.
1t would not be diSconcerting II
the Federal Government really start
ed a trend Of expenses downward or
II 1t could give an accurate indica-
tion OF where 1t was going. II Mr.
Roosevelt had said four years ago
that the deficit would last seven
years and that the public must not
expect q balanced budget for that
period, his present figures would not
now be open TO attack.
But there is something more than
mscalculation Of figures which makes
the budget situation bad 1t Is the
utter inability of the managers of
the public business to learn the first
lesson that all managers of private
business must learn, namely, that a
rising curve OF expenses cannot con-
tinuously exceed rising curve OF
receipts. Expenses must keep going
down or at least not rise while every
effort Is made to push receipts up
ward.
AZ matters stand now the admins
tration is in the position Of many a
manager of private business who lets
his expenses run up and yet keeps
on comforting himself with the
thought that next year and the next
year. and 50 on, he will sell more
goods and make more profits. Many
. manager Of private business has