The Daily Alaska empire., 1946-05-22
Debt Limit, Spending Limit
(New York Times

tNeW Eork 1lmeS)
 The action of the Senate Finance Committee, in unanimously reporting with Administration approval bill reduce the public debt limit from 900 900 to $275 50000000oO is encouraging far it goes But the action is merely symbolic. It will acquire real meaning only if it is followed by actual steps to reduce expenditures and to balance the budget.
 Secretary Vnson declares that the public debt has been reduced by $4800 000 900 since March and that reductions will total $700000000 by May l. But these reductions are technical The Government had prev iously borrowed than it needed to spend it is paying off the borrowings with the accumulated cash that they brought in There has been reduction of the Governments gross debt, but not of it's net debt the latter has, in fact continued to increase. Secretary Vinson is certainly optimistic in declaring that the Governments debt is "in good shape" and that i've are managing wel' If debt that ap- proximaes s274 100000 with huge amount of it in short-term obligations held by the banks, is in good shape" what sort of situation would be required to make MT Vnson think that the debt was in bad shape?
 There is no room for complacency about the Gov ernment's fiscal affairs moreover as long the President still officially estimates deficit of the magnitude of more than s4OOO 100000 even for the fiscal year 1947. The first step that should be taken is completely new set of official estimates balancing than balancing the budget of 1947.
 The President and MT. Vinson have put their emphasis on the importance of maintaining strong tax structure" in order to move toward a balanced budget and to pay off debt. The heavy tax burden that the country now supports must De continued in the present emergency. But the real emphasis must be cutting the huge expenditures that being made and being planned. The Presi- dents budget for 1947 called for spending than S35 100000 in that fiscal year. This is than four times the average annual expenditures of the years 1886 to 940. It is than times the average annual revenues of these prewar years. No one considered that the tax burden in incomes and business neglibe at that time. bipartisan group of members of Congress from both Houses issued statement recently in favor of balanced budget for the Federal Government in the fiscal year 947. This week the Governors of twenty | six States also made bipartisan appeal for bal anced budget in 1947 The Citizens National Com mittee recently tried to show by separate cassfca tons, that of the than S35,000000000 proposed
 to be spent in 1947 at least 900 100000 open
 to challenge There is plenty of to cut if there is will to cut.
 Of all the forces making for imitation today the state of the Federal finances is the most important There is great deal to be done in demonezing the public debt, or at least in preventing its further monetization. But before steps be taken in this direction with any assurance that th.y are going to count in the long the country must be confident that Federal deficit financing has end This not price control which deals merely with symptoms is the crucial front where the battle against imitation ] will be lost