Evening star., 1945-11-25
Sees Balanced Budget
AnswertoU. Problem
Observer Says Deficit Spending
Is q DANGER
By Raymond Moley.


Is q Danger
By Raymond Moley.
It Is about time to bring back into
the American language the almost for.
gotten phrase balancing the budget"
In prewar years the New Deal made 1t
the mark OF reaction and selfishness.
In the war 1t seemed to be relic Of
past ages, like the bones Of the Pilt-
down man. But, II presently revived rs
an issue. 1t might become the shot in
the arm which an apprehensive coun-
try needs. ~
Balancing the budget is no longer .
purely academic idea. It can be an
attainable objective, and if Messrs.
Truman and vinson want to see pro-
duction and investment take turn for
the better, they viii make it major
objective to their administration.
In the budget year ending June 80,
1945, we raised In taxes Of all kinds the
most colossal intake in our history or in
any nations history-$47, ,ooo, ,ooo, 900.
This was larger than the total national
income in 1882 or 1888. But we were at
war, and We needed another $4,000
100000, which we borrowed from our
people. Our present tax haul Is pos
sible only because our national produc.
ton has moved up to 5000, ,0oo. .0o0, 900.
With the income of 1899. no such reve-
nue. would have been possible. Our Fed
eral income was then IS 900, 900 900, and
our expenditures were about $5,000,-
100000.
The first oficial estimates for the
year ending next June reveal high
rate of expenditure. The figure may be
in the neighborhood of s65 200, ,o0o, 900
for the year.
These preliminary estimates suggest
that the national income will fall 20
per cent. They also assume that Con-
gress will cut five or six billion from
present tax rates. This would bring
Federal income down to $35,00o, 900 ,0o0
which would leave . deficit Of some
$50, ,0O0, ,000, 900 to be covered by borrow
ing or by unusual sources Of income.
One of these unusual sources would
be the sale of surplus war goods and
plants. The total from these has been
estimated at something between $50 O0o,-
000, 900 and $50 900 600, 900. This money
would not come into the Treasury in .
single year. but In two or three years.
We are now raising $ll ,000, 900 900 in a
Victory Loan.
| II, moreover, Congress attacks esti-
mates with the vigor apparently now
contemplated. expenditures Of s65,ooo.-
100000 may be reduced. The public
and Congress may succeed In demobiliz-
ing the armed forces sooner than ex-
pected. That would mean . saving.
There undoubtedly are other military
expenditures which can be and will be
cut away.
It might be added with some peril
nence that number Of other factors
brightens the outlook. Almost 10 per
cent Of our national debt is in the hands
Of agencies Of the Government itself
This means that Uncle Sans left-hand
pocket owes the right-hand pocket some
billions OF dollars.
| On the basis Of these rough figures
! and suppositions. the idea Of balancing
the budget within the next two fiscal
years is not wholly chimerical 1t would
be an objective possible OF realization,
except for number of large and ind.-
terminate factors. What were our COM
mitments in this fateful year? What
must We lend to our Allies? What must
We spend on our former enemies? What
other commitments are there indirectly
due to our war activities?
All of which suggests how wise vas
Bernard Baruch's suggestion that we
take national inventory, that We care
fully examine our bank account before
We draw checks and that We encourage
no further expectations before we see
what we have to give. The Baruch sus-
sestion is that only the excess OF Ameri-
can production be available for foreign
countries-the production above what Is
necessary to stop disastrous imitation
here.
1t is hard to believe it, but the greatest
obstacle to balanced budget in the rel
atively near future is not the taxpayer.
1t is the theological obsession Of those
who believe in deficit spending. This
idea Is embedded in the philosophy Of
the full employment bill As long as a
vague commitment of that sort exists
no hope Of q balanced budget can be
extended.
| -
On October Is Of this year Secretary
Vinson said that . balanced budget
might be attained in 194s. A date even
ahead Of that may be possible. But
until the administration firmly commits
itself to the attainment OF balance ut
the earliest date and until It clearly
appraises its commitments. uncertainty
VIII continue. And uncertainty will
retard production and contribute to
| imitation.
$50. The management was that OF
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