Evening star., 1943-05-17
Government Divided
On Balanced Budget,
Brookings Reports
Survey Describes Opposing
Ideas Of President
And Resources Boord
By the Associate Press,

By the Associated Press.
The Brookings Institution said
today there is a schism in high
Government circles" over the ques-
tion of whether a balanced budget
is desirable. with President Roose-
welt and the National Resources
Planning Board. which he fostered,
in opposite camps.
The institution, privately
funded organization, published a
survey by Harold c. Moulton, it's
president, which described the two
opposing PHILOSOPHERS with respect
to public finance" in this manner:
THE first, which may be called
the traditional view, is that con-
tinuously unbalanced budget and
rapidly-rising public debt imperil
the financial stability of the Ma
tion. The second, or new concep-
ton, is that huge public debt is
national asset rather than a lia-
bility and that continuous deficit
spending is essential to the economic
prosperity of the Nation. Accord
ing to this view, the conception of
balanced budget belongs in the
category OF obsolete economic
dogma, the fallacy of which has
been clearly demonstrated in re-
cent years"
Support New Philosophy.
THE traditional view the report
said, lis held by the United States
Treasury, by the Board of Governors
OF the Federal Reserve System, by
the President, by numerous congress
sional leaders both in the House and
in the Senate. and by many indi-
viduals occupying important posi-
tions in the administration
The new conception is advocated
by the National Resources Planning
Board, by numerous individuals
high in the councils of the Govern
ment and by various groups not con-
nected with the administration. -
"Of the numerous individuals
within the Government who are ad-
vocates of the new philosophy. the
most outstanding are A. A. Berle,
jr.. now Assistant Secretary of State.
and Prof. Alvin H. Hansen, special
economic adviser to the Board of
Governors of the Federal Reserve
System and the National Resources
Planning Board"
Quotes Secretary Morgenthau.
The institution said that the ira
ditional point of view on public debt
"is implicit in all of the Treasurys
literature in connection with the
sale of War bonds" 1t quoted Sec
retary Morgenthau's testimony be-
fore congressional committee in
which he said that borrowing, in SO
far as is possible, should be paid
for now"
The President, in presenting the
1914 budget. said that a debt of
s2l0000,000 900 can and will be re-
paid" the report said.
The National Planning Board,
official agency of the administra-
ton with respect to the broad field
of economic and social planning, in
its pamphlet entitled After Defense,
What?' holds that financial costs
are of no consequence-that if we
JASL ~ dItCdu DOIoly "lell ~ oAuS-
tion everything will be in order" the
report said.
Printing Press Method.
:" 1t is evident ." that it is
assumed that a substantial portion
of the Governments funds would
permanently come from borrowing
operations, and that at such time
as it became difficult or impossible
for the Government to borrow the
money through the sale OF its Sc
curities, it might resort to the use
of non n-interest bearing Treasury
rotes-in other words. to the print
ing press method. 1t should be
made clear that in this document
tplans for financing and fiscal pol
fey, the National Resources Plan
ming Board does not actually rec
ommend the use of non-interest
bearing notes; it only indicates that
this is method worthy of con-
sideration."