The Waterbury Democrat., 1938-12-21

plant of the country would be call ed investment and not expenditure.
 In other words, if a corporation spends a million dollars to run its business and borrows million to build a plant, that million is not called an expenditure, but an in- vestment. And so if the corpora ton has receipts during the year of $1,500,O00, then it will not be said to be in the red because it spent $2,000,00O. Half of this would be called investment.
 FALLACIOUS
 REASONING
 In the same way it is said if the government puts out money on its plant in such way as to increase the earning power of the country, then the money thus spent should be called investment and not ex- penditure.
 In looking this over, the citi-
 zen should be careful to keep in
 mind the difference between the government and the country. ] They are not the same. The coun-
 try includes all the people. The government is merely one public agency set up to serve all the people in certain very limited
 areas. Everything that belongs to
 the government belongs to the people. But everything that be-
 longs to the people does not be-
 long to the government.
 If we were to keep a set of books on the business affairs of the peo- pie as a whole, the asset side would include all the wealth; the liability side would include the total obli- cations The income side would in- clude the total income and so on. But when we are keeping books on the government the asset side n- cludes only what the government owns and the liability side only what the government owes. The in- come of government is what the government takes in; its expendi- lures what it pays out.
 It is like great public corpora ton organized to perform certain important services for all the peo- pie. It has only one source of rev. enue-taxes and penalties. However, the government may go into bus mess. It may build a power plant and sell power. It may build and operate a railroad In that case it has a profit as part of it's income. It may lend money, as it does in the R. F. c. and then it has interest as its income. Now then a govern ment lends money and the loan is appraised as sound it is entitled to put that down as an investment. The interest will come to the gov- ernment The government can use it any way it wishes.
 IMPROVEMENTS BELONG
 TO THE OWNER
 But when the government per- forms some service for its citizens -as for instance when it helps farmers to improve their land the improvement in the land belongs to the farmers, not the government. An electric light corporation fur nishes me with power. The power enables me to make great deal of money. But because my utility com pany helps me to make money, it will not be justified in putting down the increase in the value of my fac- tory as an asset. It is the same with the government.
 Of course the improvement in
 the farmers land may enable the
 farmer to make more money and
 thus enable the government to
 extract more taxes from him. It
 is assumed and it fair assump-
 ton that all government expen-
 ditures as a whole add to the
 value of the land and the taxable | A city builds a school and fire
 house and immediately the land
 values of the neighbOrhOOd rise.
 but the city cannot add these
 land values to it's corporate assets
 and include them in it's books,
 even though it is able to tax
 more.
 All these government expendi- lures may be justified in the case of the school and firehouse, but that is no reason why city should fool itself and monkey with its books to complete the delusion. I / ~