AIM OF U.S.A.

Auckland Star, Volume LXV, Issue 4, 5 January 1934, Page 7

AIM OF U.S.A.

"PAY AS YOU GO."

RECOVERY DEFICIT.

To Raise Loan of Ten Billion

Dollars.

BALANCED BUDGET BY 1936.

[United P.A.—Electric Telegraph—Copyright)

(Received 10 a.m.)

WASHINGTON, January 4,

President Roosevelt reported to Congress to-day a prospective recovery campaign deficit of 10,000,000,000 dollars for the next two years, and asked that the "lid be clamped down" to put the United States Government on a "pay as you go" basis by 1936. Mr. Roosevelt definitely committed the Government to a policy of regaining prosperity through spending when he submitted Lis 1934-35 Budget Estimates, calling for the expenditure of 10,569,000,000 dollars in the current fiscal year, ending Juno 30, and some six billion dollars in the following fiscal year, with the appended information that ten billions must be borrowed by the Government within the next six months to meet unprecedented expenses coincident to the recovery programme. The message envisaged receipts during the two fiscal years of 7,234,000,000 dollars, compared with aggregate expenditures of 16,529,000,000 dollars, with an anticipated public debt of 31,483,000,000 dollars on July 1, 1935, i compared with the current year's total of 23,813,000,000 dollars.

Tho war time peak was 26,593,000,000 dollars, and the post-war total was as low as 16,185,000,000 dollars in 1930. The 1934 expenditures include 3,045,000,000 dollars general expenses, and 6,375,000,000 dollars for emergency appropriations. The general expenses are considerably less than the 4,218,000,000 dollars total estimated by Mr. Hoover in his Budget message in December, 1932. Emergency appropriations were then, of course, not anticipated. "Brutally Frank." In listing extraordinary expenditures for 1934, Mr. Roosevelt did not include the extra requests for 1,166,000,000 dollars, which make a total of 10,569,000,000 dollars. Tho message, which the President regards as "brutally frank," is clearly based on tho most pessimistic possible estimates of revenue, and makes no allowance for almost certain increased tax on spirits from 1.10 dollars to 2 dollars per gallon. In the Estimates the payments duo on war debts are regarded as a total lose, although the Administration has by no means abandoned hope of realising something on them. The statement likewise took no cognisance of the efforts of Congress to prevent wholesale income tax evasions under the present laws. On tho other hand, estimated emergency expenditures are so large that some Congressmen doubt the Government's ability to spend so much. The President clearly indicated that he expects relief needs .to taper off during 1934-35, and through normal recoveries by 1936 to have "truly" balanced the Budget. Philosophy of Policy. Summing up the philosophy behind the expenditure programme, Mr. Roosevelt said: "Powerful forces for recovery exist, if, by laying a foundation of confidence in the present and faith in the future, that upturn which wo so far have seen will become a cumulative corner stone. This foundation is the credit of the Government. If we maintain the course I have outlined, we can confidently look forward to cuinulativ e beneficial forces represented by an increased volume of business, more general profit, greater employment, a diminution of relief expenditures and laiger Governmental receipts and repayments. Trusting to Future. In simplified language President Roosevelt said lie anticipated a 7,000,-000,000-dollar deficit in the current year and a 2,000,000,000-dollar deficit next year, with no new specific taxes to meet the difference, but trusting to increased business, with a corresponding reduction in appropriations, to even things off eventually, and in the generation to come to liquidate the vast public debt. Tn round figures the current emerexpenses include public works, 1677,000,000 dollars; agricultural adjustment, 103,000,000 dollars; farm credit, 40,000,000 dollars; conservation corns 341,000,000 dollars; Reconstruction Finance Corporation, 3,969,000,000 dollars; Tennessee Valley ™orks, 19,000,000 dollars; land banks, 52,000,000 dollars; deposit insurance, 150,000,000 dollars; administration or the N.R.A., 4,250,000 dollars. Large Per Capita Debt. It is estimated that the expected 1935 deficit will represent a per capita debt of 250 dollars in the nation s 128,000,000 inhabitants, compared with a per capita debt of 133.53 dollars in 1930, and 11.83 dollars in 1915.