The people's voice., 1959-03-20

of the legislative program of
and House.
1t would enable Congress and the
executive agencies to distinguish be
tween productive investments made
by the federal government, and spend
ing for current operations. This would
be the difference, for instance, be.
tween loans to rural electric cooper.
atives for construction of generating
and transmission facilities, and the
payroll disbursements to REA ad-
ministrative personnel in Washing
ton and the regional offices.
Senator Hubert H. Humphrey ID
Mimi also is working on capital
budget measure. In recent speech
he declared:
81 have proposed for several years
that we lift the fog as to government
spending by adopting a capital budg-
ct, just as any sound private business
does. 1t is my intention to introduce
new legislation for that purpose in
the current session of Congress . &.
We have been lulled and propagan-
died into believing government eX-
penditures, unlike private eXpendi-
lures, and regardless of their use,
offer no achievements"
A NEW APPROACH
Senator Morse had a similar bill be-
fore the Senate last year. Upon that
occasion it was drafted as an amend
ment to the Budget and Accounting
Act of 1921. The present bill would
be an amendment to the Unemploy-
ment Act of 1916.
In addition to distinguishing be-
tween capital investments and operat-
ing expenditures, the bill would bring
about reduction of the national debt
by excluding from it's computation
productive capital investments, in
cluding mortgage loans, which have
useful economic life of more than ten
years and which are self-liquidating
in nature
AS part of the planning process
under the Employment Act the Presi-
dent in his annual economic report
would be required to submit to the
Congress a minimum and maximum
program of proposed capital invest
ments for the coming year, and a
six-year program.
Such basis of planning and re-
porting has long been sought by pro-
gressive economists and legislators,
but has been consistently opposed by
those who prefer to regard all spend
ing by the federal government, wheth-
or for dams and power plants, recla-
nation projects, or housing as some
hing close to dissipation of the tax
payers money. More bewildering
1ocus-pocus has been spoken and
written on this subject than on al
most any other.
LIFTING THE FOG
Sixteen years ago Stuart Chase in
| volume entitled where's the Money
Coming From" clearly defined three
different kinds of public debt as
ollows:
DEAD WEIGHT DEBT, for which
10 useful plant is built. This includes
,utlays for war, for relief, or for cur
ent expenses. ,
PASSIVE DEBT, for non-revenue-
producing public works, such as pub !
ic buildings, Fairgrounds, monu- :
nents like the Lincoln Memorial.
"ACTIVE DEBT, for revenue pro
ucing public works, such as toll
ridges, the IVA, water works, per-
etual-yield forest projects"
1t is the classification which would
e excluded from a statement of the +
et public debt-that part of the debt I
yhich must be retired mostly from S
urrent taxation, and not from reve- /
'ues of income-producing properties. n
he self -liquidating projects need be n
O burden upon the taxpayer. They f
arm their own way, and generally
luch more generously than any kind I
f private investment.
For instance, it has been calculated a
nat increased income taxes produced Il
Y seasoned reclamation project will b
uual in three of four good years the S
ntire capital cost of building the 3
roiect. The income from some of
le federal power projects, not only j
epays capital costs with interest, but +
rovide money from revenue for the W