Evening star., 1938-04-16

income can be "
raised to $4,000 100000 a year, the
National Government and the over
whelmlng majority of State and local
governments will be out of the red.
The higher the national income goes
the faster will We be able to reduce
the total of Federal State and local
debts"
Back in 1929, the national income
was about S8l 900 100000 and the
Federal debt was about $1,000, ,OOO,-
600.
Today the national income is run
ming at the rate of S56.00O 10000,
having dropped twelve billions from
last year, and the Federal debt has
risen to about $4,000 100000.
Points to Higher Income.
Mr.. Roosevelt points out that the
national income was about S30,00O,-
100000 more in 1897 than in 1882
and that the Federal debt had in
creased about $4,000, 100000 since
then. Does he mean now that as
''pump-priming' is resumed in order
to raise the national income, it is
also healthy to keep on adding to
the Federal debt?
The record shows that between
1882 and 1887 there was the most
rapid increase in the Federal debt
than at any time in our history with
the single exception of the war years
Approximately two dollars of national
income was added for every dollar
OF increased debt. Applying Mr..
Roosevelt's line Of thought. it will
be all right for America to attain an
Sl2,O00,000,0 increase over 1887
and an increase concurrently of about
$4,000 100000 in Federal debt.
The National Government would
then have debt of about $4,000
100000 and national income of
Ss1 900, 100000. Just how the Federal
Government is going to be better off
than 1t is today is difficult to follow
unless Mr.. Roosevelt thinks that a
balancing of tax receipts and expenses
is going to be possible only when an
s800000 100000 national income is at
tanned. If that is what he means by
getting 'out of the red" then the
American people will find themselves
with the biggest debt in all history
and with a tax bill which will take
the biggest chunk ever taken out of
the national income.
20 Per Cent Limit
Taxation is extracting a bigger and
bigger sum annually out of the streams
of purchasing power and the money
Is being turned over to the Govern
ment to be spent in w. P. A. and other
productive ventures which do not
add to the permanent wealth of the
country. When the percentage of tax
receipts to national income gets to be
20 per cent then the national income
usually breaks down. This has been
the experience of governments in
many parts of the world. The cost of
government today-Federal. State and
locals about s17,O00,OO0 900 a year
Divide that into a national income
Of $4,000, 100000 and you have about
81 per cent. This would mean that
one out of every SIS earned would have
to be given directly or indirectly to
carry the cost of government in
America.
Tax receipts today are way below
the 20 per cent mark OF national in
come and are really around IL per
cent, the difference covering the total
cost Of government Icing made up
by borrowings. And the tax rates
are so high already that they interfere
with consumer buying.
What Mr. Roosevelt never takes
into consideration is that taxes are
part OF the cost Of living and that the
exchange of goods and products tends
to diminish and unemployment ensues
whenever the prices get beyond the
working mans means.
No Provision for Retirement.
The President says nothing either
about debt retirement. In his budgets
of $7,000,00000 a year he makes no
allowance for sizable debt reduction.
Maybe he has never borrowed any
money at the banks in his life and
maybe he has never been in busi-
ness which borroWs money but the
customary experience of citizen who
seeks to borrow is that he must make
some provision for paying back what
he owes. Mr.. Roosevelt evidently
clings to the notion that the Ameri-
can people will keep on lending their
money to a National Government
which not only refuses to make in
stallment payments on its own debts,
but actually believes in enlarging the
DEBT without making any provision for
taxes to pay the annual budget ex-
penses.
Such ideas of national economy are
reminiscent of what the new era"
boys used to discuss in Wall Street
before 1929. The only difference today
is that bunch of politicians have
gotten hold Of public funds and have
discovered that they can keep the
printing presses busy issuing bonds
as fast as gullible citizenry puts
up its cash to buy these bonds.
Roosevelts 1888 Views.
Mr.. Roosevelt ought to forgive be-
wildered citizens if they do not believe
him now but prefer to believe what
he said In an address to both houses
Of Congress on March 10, 1893:
For three long years the Federal
Government has been on the road
toward bankruptcy" He then re-
counted the Hoover deficits, totsling
the combined red figures of 1872
and the fiscal year estimated until
June 80, 1888, and said:
Thus we shall have piled up an
accumulated deficit of $4,000, 900 900"
In, his first and second administra-
tions Mr.. Roosevelt now has piled up
nearly $4,000, 900 900 of deficits. HH
words on March 10, 1888. were:
with the utmost seriousness point
out to Congress the profound effect of
this fact tthe $5000,000,0O deficits)
on our national economy. It has con-
tributed to the recent collapse Of our