Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-12-27

and professor OF public ldtD, an
early member OF the Netp Deal
brain trust, Is noted analyst
OF domestic and international
affairs. His associate in this
series, Julius Hirsch, is a pron,i-
nent economist of Ne,D York
and senior OPA consultant.
This is the first OF these articles.)
BY RAYMOND MOLEY and
JULIUS HIRSCH.
NEW YORK, Dec. 27.-Most peo-
pie seem to be resigned to heavy
taxes and large budget deficits for
years to come. They also view with
great apprehension the unearthly
national debt and the imitation
threat in the wide river of loose
money now In circulation.
The facts, with respect to all but
one of these gloomy apprehensions,
are more encouraging than the gen.
eral opinion. There will be very
heavy taxes, it is true. That can be
borne. But there need be no deficit
after the next fiscal year. The bur-
den of debt can be carried, and there
are safeguards to prevent the dis
astrous inflationary effects of the
money supply.
The authors of this and succeed
ing articles have attempted a realis-
tic examination of available figures,
have talked with representatives Of
the administration and with SEN
ators and have weighed the factors
on all sides of the fiscal picture.
We have tried to avoid the seductive
|skywriting of the deficit-spending
school, on the one hand, and the
dripping clouds Of gloom-invested
reactionaries on the other.
See No Imitation Threat.
We venture to believe that these
propositions are provable and will
be evident when all the facts are
shown:
l. That while the last war years
brought deficits up to 100000, 900 900
or more. the deficit for the current
fiscal year may not exceed $26,000,-
100000, of which the Victory Loan"
alone may provide almost $4,000
100000; and that the remainder will
certainly be taken care of without
any threat of imitation.
2. That in the next budget year,
1867, called THE Year of the
War Aftermath" a scheduled def
cit of 100000, 900 to $4,000, 900 900
need scarcely arise: in fact, we
should be able to balance the first
full peace budget without any sub
stantial deficit.
8. That the envisaged normal
peacetime budget of the next years
can be balanced without further
loans and may even allow a small
amortization.
Lower National Debt.
4. That our national debt will be
lower than generally expected-not
at or beyond $500 600, OOO, 900, but
around S275, OOO 100000, and that
even this figure overstates the real
burden left by the war; That the
net and actual increase of our ma
tional debt by this greatest of all
wars may not exceed $3.50 ,0O0, 900 900,
or the amount of our national in
come in the one year 1915;
S. That money in circulation, which
has swelled from $1,000, 0O0,0 900 in
1889 to $4,000, 100000 at this mo-
ment, will soon decrease and is GER
tainly no danger to the stability of
our economy.
The budget year 1945-46 began on
July l, when the war was still on
and large expenditures for a possible
longer duration of the war had al
ready been incurred. The first gift
of Congress to business and John @.
Public was the scrapping of about.
Sc, DOC, 900, 900 taxes, Of which the
most important was through the
abolition of the excess profits tax
Victory Loan to Cover.
The Budget Bureau forecast some
ago that the whole expendi-
ture may be s65 400 ,000, 900, and that
taxes, plus some smaller receipts
from war surplus goods, may yield
$35 900 900 900. The deficit would
then be somewhere around $3o,OO0,-
000, 900. We have reason to believe
that the expenses will probably be
reduced by about 81, ZOO, 900 900. This
leaves us for the current year with
a deficit of about $4,000 ,000, 600
most of which is already covered by
the Victory Loan"
The situation looks even more
favorable for the next budget year,
which will begin July /, 1916. Sec
rotary of the Treasury Vinson has
declared he hopes to manage this
year of the aftermath of the war
with deficit of only $1,000 900 900
to $4,000, 100000.
The idea seems to be this: The
normal peacetime budget may run
up to s23, 600, 900 900 to $25 900 600, 900.
This year of the war aftermath"
however, may bring large expenses
for the final rehabilitation, for re-
lief in Europe and Asia, and for
financial operations like the one just