The midland journal., 1945-09-28

LILA AL NAsMSTYN6S
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By PAUL MALLoN
Released by Western Newspaper Union.
GOVERNMENT SPENDS TO
REACH PEACETIME HIGH
WASHINGTON.-The key to what
the Truman administration is up to,
economically and financially, lies
only half-hidden in figures an
nounced by Budget Director Harold
Smith. A little inside work with
pencil on these will show you:
(A) Much tax reduction is unlike
ty. In fact it may be only what
might be called (and is already pri-
vately being called) political" re-
duction. BY this is meant mild and
perhaps complex revision slightly
downward but actually maintaining
government revenues near what
they are.
(B) The spending program Of
the first peace year will make
pikers out of both Franklin
Roosevelt and John Maynard
Keynes who led the way in this
world for an established policy
Of tremendous government out
lays far beyond anything hither-
to conceived In the mind Of man.
The Truman treasury expendi-
lures are to run 5015 billion dol
lars for this fiscal year mine
months to RUM says Mr.. Smith.
The vaunted Roosevelt spending
program Of the bottom-depres-
sion year of 1888 ran 0ne-tenth
Of that sum and Roosevelt In all
his years never spent 0ne-fifth
Of that sum.
CO. To talk of further government
appropriations now, to cushion the
conversion. period, in the face Of
such tremendous spending pro-
gram, not only runs the extremity
Of the sublime to the ridiculous, but
creates new category at the end
which might accurately be de-
scribed as ridiculous sublimity.
TAXES WON'T COVER SPENDING
will try to analyze these mat
ters for you in detail, as they reach
down into the fundamentals Of all
the domestic postwar problems with
which we are confronted, and in-
deed, our foreign problems as well,
because Mr.. Truman has wiped the
Lend-Lease slate clean, and is start
Ing upon new additional lending
program abroad.
Take taxes first (as no one here
is). Mr.. Smith concludes the pres
ent heaviest war rates will not this
year produce the bulging As billions
cleaned last year. He assumes no
doubt that much less business will
be done and people will produce
less, although the stock market does
not seem to think or say so, as it
continues to disregard any postwar
possibilities of less corporate or in
dividual income or spending as a
whole. At any rate Mr.. Smith says
he will only get 36 billions out Of
these rates this year.
If the government is to spend
502 billions and takes i'm only
S6 billions, it is evident real tax
reduction is impossible. So il
looks like the best that the re-
election hungry congress may
do is to patch together some
kind of tax reduction effective
next January / which will make
everyone feel little better-ex-
cept in the pocketbOok.
The talk is they will reduce the
normal income rate from per cent
to 4 or 8, but keep the Withholding
tax (treasury intends to keep this
probably permanently with pay-as-
you-go) and the other individual
rates where they are. Great demand
Is present for abolition Of the COR
poration excess profits tax.
BUDGET SHOULD BE LOWERED
The fiscally willy Republican Mr..
Knudsen claims the budget for next
year beginning next July ~ ought
w NC OOWA dIOuIlU 40 DllllOIlS, WHICH
weuld enable a genuine tax re-
duction, If receipts are kept running
10 billions higher. Of course there
Is debt retirement to think of and a
considerable excess of receipts
should 60 into this Gust carrying the
debt will cost six billions annually
in interest).
Two schools of thought are de-
veloping in congress behind this
condition Of financial affairs. The
line I have outlined is that Of
the administration and what
seems likely to be the major
ity. But there is another school
which claims it is far more nec-
essary to create a proper spirit
toward progress In the country
than to run everything down too
closely to fiscal policy. This
school advocates q genuine tax
reduction now In anticipation Of