NATIONAL EXTRAVAGANCE

In an interview which the CRIMSON published a few days ago, Senator Caldor criticised one of the weakest features of our government--extravagance. The majority of thinking Americans would agree with him in favoring this budget. But we have become so hardened to the accusation of extravagance, and the idea of thrift seems to have gone so thoroughly out of fashion, that all reform which aims to curb unproductive expenditure is regarded in much the same light as an umbrella on a clear day.

It is generally admitted that this country prepared for her part in the war in about as extravagant a manner as possible. Circumstances seemed to justify this action since we had more money than time with which to get our men into the trenches. But we have elevated this excuse for an emergency into a rule of conduct. Our bills were not paid with the signing of the armistice. With a funded debt of twenty-six billion dollars, there is an annual interest charge of over one billion. From the $750,000,000 which flowed into the Treasury last Tuesday from the second installment of Federal income and excess profits taxes, $728,000,000 were immediately used to meet the payment of Treasury Certificates, while, at the same time, $400,000,000 of new Treasury Certificates were offered to meet the current expenses of the government. A man who spends his salary before he receives it, is not usually regarded as a safe borrower.

If now, it should be found that this huge floating debt is due to the government's inability to convert it into long term bonds, the indictment against the people is even worse. We no longer have more money than time. We are up to our ears in debt, refuse to face the facts, and are spending lavishly. It is always difficult to curb and sacrifice. That is why people are talking today so glibly of redistribution and dispossession. The rearrangement of two lines never made a triangle; only the creation of new assets will be able to pay off our debt incurred during the war. This requires greater efficiency on the part of all workers with loss unnecessary consumption. Any other program than this one of astringent thrift will not reduce our mortgage one penny.

In view of the fact that the government's ordinary disbursements were a little less than three times as great as its ordinary receipts last year, it seems rather useless to advocate a tax reduction. Indeed, the people of this country face an alternative. They may continue their reckless extravagance, in which case the price of government bonds will continue to fall. The unwholesome item "loans on government securities" will continue to rise; the government will be unable to sell its certificates; drastic taxation will inevitably follow. Under such conditions the amortization of our national debt would be impossible. As an alternative the people may save. New assets would then be accumulated. The inflation of loans which the Federal Reserve Banks has been fighting to the extent of raising the rediscount rates to 7 percent would cease. Our national debt could then be genuinely paid for by savings.

Such facts do not possess the interest of a detective story, but since a "promise to pay" must be met and when it is remembered how free we have been with our promises, these facts at least are pertinent.