AMERICAN DEBT

Rotorua Morning Post, Volume 2, Issue 242, 2 June 1932, Page 3

AMERICAN DEBT

UNCLE SAM HAS TROUBLE IN BALANCING HIS BUDGET. SOME REVEL ATION S NEW YORK. Uncle Sam, making frantic efforts to balance his Budget, has in his dilemma given his family some provoking revelations. For the present debilitated condition of public finances he blames, first the municipalities; second, the individual States; third, and least culpable of the three, the Federal authorities. His fiat has gone forth. Retrenchment, commencing from the bottom, rather than from the top, holds the key of the return to prosperity. It will he an unpaitable pill for the towns and cities to swallow, but swallow it they must. Here are some of Uncle Sam's revelations, for the benefit of his spendthrift children: — (1) The gross expenditure, Fedferal, State, and municipal, has inci'eased since 1913 from £600,000,000 to £2,600,000,000. Of this the Federal share is £800,000,000; the State. £200,000,000; the municipal £1,600,000,000. This represents an advance in per capita cost from £6 to £18. Yet the Federal per capita expenditure has been reduced by ten shillings in the past six years, while the national debt has been redueed hy £2,000,000,000 in the same period. (2) State and municipal expenditures have increased from £450,000,000 to £1,800,000,000 — an average annual growth of 20 per eent. (3) Taxation, in the aggregate, has gi'own from £400,000,000 to £2,000,000,000 — from 6.4 per cent. to 14.4 per cent. of the national incoxne, or froxn £4 5s to £16 12s 6d. The ordinary family of five persons, directly or indirectly, is therefor-e called on to contribute £83 2s 6d yearly, on the 1930 basis. (4) The total national State, and local government debt has grown from £840,000,000 to £6,000,000,000. While during the past six years the national debt has been reduced by £1,000,000, the state and municipal debt has increased by a similar amount. (5) Uncle Sam suxxxs up the position thus: Debt, £6,000,000,000; yearly taxes, £2,000,000,000; yearly expendxtur*e, £2,600,000,000. The saturation point in each has been reached, in his judgxnent. Living on borrowed money, and expenditure by public bodies without provision for revenue have produeed the natural result — penury. What ever readjustments in taxation are xnade, retrenchment must be first. On that course Uncle Sam is determined.