Evening star., 1950-01-01

a good start in that direction.
Sound finance" has had no
stancher advocate in this genera
ton than Virginia's senior Sem
ator. Harry F. Byrd.
Would Limit Spending.
AS compared with the $43,500.-
100000 which the administration
now expects will be spent by the
Federal Government during the
fiscal year ending next June,
Senator Byrd would limit Federal
spending next fiscal year to $780,
900, 900. 900, which still will be
nearly $2,000,O00,O0O more than
was spent in fiscal 1948. The cut
OF $500, 900, 900. Byrd says, can be
made without superhuman effort,
by slicing bits and pieces from
social welfare and housing, nat
ural resources, national defense.
foreign aid and veterans. Thus,
if the Virginian had his way,
fiscal 1851 would substitute a sur
plus of possibly $4,000, 100000 for
the current years anticipated
S.. 100000 deficit.
Among numerous other men,
bers of the Congress who have
been talking spending cuts of
late is Senator Paul Douglas, Illi-
nois Democrats former profess
sor Of economics and a strong be-
lever in deficit spending in times
Of depression. When there is full
employment, as at present, Sena-
tor Douglas thinks a deficit is not
excusable. He has suggested vari-
GUS cuts in spending which would
eliminate the greater part of the
present $5,500.000,000 deficit.
Senator Douglas suggests look
ing for ways to eliminate sub
sides to special groups. He
argues that the postal service
should be made self-supporting.
Its $500,000,0o0 annual deficit
should be wiped out by reducing
costs and increasing rates for
those services now not paying
their way: Cod, special delivery,
postal cards, money orders and
registered and insured mail.
Deficit Was Danger Signal.
Senator Douglas thinks that Z |
or per cent of the cost Of Gov
personnel can be elm
mated by staff reductions, as
through non-replacement when
workers resign or retire, and re-
duction of the present excessively |
liberal annual leave. Also, the
Senator would cut out a lot of
the pork barrel fat latterly cam
ouf1aged in the budget under the
title. Civil Func-
lions of the Army.
The writer remembers when a |
Government deficit was regarded
as a red danger signal, the first |
step down the path to dread in
f1ation. Then, during the depres-
sion years of the 1930s professors |
and others assured us that the
budget did not need to be
balanced annually. but only with
the fluctuations of the business
cycle: That in hard times the Gov
ernment ought to borrow and
spend-infate, if you please-and
then, when business is good again,
pile up surplus to compensate
for the depression spending. The
public debt, we were further ad-
vised, was not the evil burden we
used to think it was. Anyway,
I'VE just owed it to ourselves"
Now we wake up to find that
the Nation has become largely in
ured to deficits as more or less
normal" A whole generation of
Americans has grown up in a
period of deficit financing. There
has been budget surplus in only
two years since 1880, an average
of one sound year in 10. And
once again economists of the
spending school are telling us not
to worry about the debt: 1T is
small in relation to our capacity;
the additional spending which the
President is proposing is modest"
Interest Five Times Greater.
Along this line the Treasury
submitted to the Douglas sub
committee last month a chart
which shows that the interest cost
to the Government of carrying
the public debt is five times as
great as in 1919, despite the fact
that interest rates are much lower:
and that the debt itself is 10
times as great as in 1919. But,
says the Treasury, the burden on
the national economy is only"
about one and a half times as
high, when compared with the
goods and services the Nation
produces. What it would be if
the Treasury did not hold interest
rates down through control of the
Federal Reserve policies the chart
does not tell.
In briefs submitted to the Doug
las committee the Treasury Budget
Bureau, with an eye on the ap-
preaching elections, defended the
current deficit financing in time
of full employment In such man
ner as to elicit from the non
partisan London Economist this
comment:
Last Deek the guardian angels
of the national sotvency-Mr.
Snyder, Secretary OF the Treas