Evening star., 1945-09-30

to cost the people about twlce what 1t
did in 1910. the Brookings Institution
estimates. That is not so fearful a
prospect as 1t seems at first glance, be-
cause national income should approach
twice what 1t was before the war
In terms of percentage, the Brookings
economists figure that government cost
22.9 per cent of national income in 1910,
and will take 25.8 per cent in the fiscal
year 1947-8, chosen as the first year in
which the transition from war to a
peace economy will have been sub
stantially completed
These figures are the total for all
levels of government, Federal, State
and local. Federal expenditures alone
are estimated to be three times what
they were before the war, but relatively
small increases in State and local ex-
penditures are expected so that the
overall total of government costs will
be not three times, but twice the pre-
war level.
33.5 Billion Total Cost.
In terms of dollars, the Brookings IN
stitution looks for a national income of
$50, 600, 900 600 in 1918 and a Federal
budget of about $4,000, 900, ,o00 State
budgets are estimated at 81, ,40O, ,0O0, 900,
and local government costs at $780,
000,00-a total cost of Government of
$50, 3,5o0. .000, 900.
These conclusions are reached in the
publication, Postwar Fiscal Require
ments," by Lewis H. Kimmel and asso-
ciated members of the Brookings staff
Actually, in the study as published
Kimmel took 1889 as the first normal
postwar fiscal year, but that was based
on the assumption that the war would
end in mid-1946. The atomic bomn
and Russia's entry into the war altered
that assumption
Kimmel now thinks that the changed
war picture will not substantially af-
feet the estimates as published There
will be some reduction in the Federal
budget because of Cancelled war con-
tracts, but increased unemployment
compensation will tend to offset this.
There will be some reduction in costs
because Of fewer casualties than esti-
mated, but more liberal provision for
veterans is apt to Offset that decrease.
On the whole, he concludes, the Federal
budget is likely to be a little less rather
than a little more than $22 900 00O, 900,
but the variation is hardly more than
the normal margin for error in any
estimate as complex as that attempted
in his study.
Sees Cost and Price Stable.
Other assumptions on which the study
Is based are that the 1910 balance be-
tween public and private sectors of the
economy will be substantially preserved;
that the 1915 living costs and price
indexes will remain at about the 1914
level; and that there will be "suhstanti-
ally full employment" in 1915.
No provision is made in these esti-
mates for debt retirement. This would
add to the Federal budget another s3,-
100000 900 If retirement were to be
undertaken at the rate of per cent a
year.
The burden of the Federal debt, how
ever, is not the major item in Federal
expenditures as classified in Kimmels
study. He uses a classification which
disregards the usual categories of de-
partments and agencies, attempting to
show the specific purposes of expendi-
lures, by whatever department or
agency.
When estimated State and local ex-
penditures are added to the Federal the
1918 estimates for total cost of govern
ment again expressed in millions of
dollars, become: