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No. 125 "You Owe Thirty-One Billion Dollars" Speech of Jouett Shouse broadcast over the National Broadcasting Company network on May 19, 1936. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_125 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 125 "You Owe Thirty-One Billion Dollars" Speech of Jouett Shouse broadcast over the National Broadcasting Company network on May 19, 1936. American Liberty League. American Liberty League. Washington, D.C. 1936. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. JOIN THE AMERICAN LIBERTY LEAGUE The American Liberty League is organized to defend and uphold the Constitution of the United States and to gather and disseminate information that (1) will teach the necessity of respect for the rights of persons and property as fundamental to every successful form of government and (2) will teach the duty of government to encourage and protect individual and group initiative and enterprise, to foster the right to work, earn, save, and acquire property, and to preserve the ownership and lawful use of property when acquired. The League believes in the doctrine expressed by George Washington in his Farewell Address that while the people may amend the Constitution to meet conditions arising in a changing world, there must "be no change by usurpation; for this * * * is the customary weapon by which free governments are destroyed." Since the League iB wholly dependent upon the contributions of its members for financial support it hopes that you will become a contributing member. However, if you cannot contribute it will welcome your support as a non-contributing member. Enrollment Blank American Liberty League National Press Building Washington, D. C. I desire to be enrolled as a member of the American Liberty League. Signatu Name J Street .................................. I Town .................................. | County .......................... Slate. Enclosed find my contribution of $....... to help support the activities of the League. Yon Owe Thirty-One Billion Dollars â˜… â˜… â˜… Speech of JOUETT SHOUSE President of the American Liberty League over the network of the National Broadcasting Company May 19, 1936 AMERICAN LIBERTY LEAGUE National Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. Document No. 125 You Owe Thirty-One Billion Dollars When you have finished with this pamphlet please pass it on to some friend or acquaintance who might be interested, calling his attention to the membership blank on page 12. â˜… I WANT to talk to you briefly about two institutions, both of which touch closely our pocketbooks and our self-respect. I refer to annual budgets the old-fashioned American household budget and the budget of the United States Government. The two belong together in this discussion because they are intimately related in theory and practice. At the outset I assert the belief that you householders are better budget-makers than are your hired representatives in high authority. As you know, a budget is simply an estimate of receipts and expenditures, usually made up in advance for the coming year. By putting these items down on paper you establish a basis upon which at least you can come close to such a control of expenditures that you will not reach the end of the year with what you would call debts, but which the Government calls a deficit. The wise budget-maker contrives to keep outgo about even with income. He balances his budget. He even aims at having something left over for a savings account. He calls that a nest egg for a rainy day. The Government, when and if it has one, calls it a surplus. A surplus in the household budget is a blessing that may ease the grief and worry of sudden necessity for hospitals and doctors. The Government, if it had a surplus, would be in a position to meet the costs of drouths, disasters and depressions without having tÂ© impose additional taxes or borrow the needed money. IF THE HOUSEHOLDER finds he is in the red at the end of the year and wishes to maintain his current credit, he borrows to make up the difference. He then has a talk with his wife and tells her they will have to cut expenses to pay off this year's debt and avoid another 3 deficit next year. If, however, he is a happy-go-lucky, devil-may-care sort of hudget-maker he will say nothing and spend more. His will be a short course. It will not be long before repeated deficits and repeated borrowings will bring him to the day when he has no more credit. His household will cease to be a going concern. Isn't it the same with Government? Let us review a few recent developments in national budget-making, annual deficits, borrowing and finally in the growth of that huge mountain of responsibility your public debt. THE FIRST STARTLING FACT we encounter is that this is the sixth successive year in which the Government has spent more than it has taken in. Those six annual deficits added together make a total to the end of this fiscal year of eighteen billions of dollars. Because of bookkeeping methods the entire amount of the deficits is not represented in the public debt but in borrowing to meet a large portion of these aggregate deficits we have nearly doubled the public debt. It was sixteen billions at the beginning of the depression and it is at this date, May 19, more than thirty-one billions. This debt was undertaken in your name. You owe thirty-one billions. The money will have to be paid. The present fiscal year will end on June 30. In a recent speech in New York, Mr. Roosevelt said we will have spent three billions of dollars more in this current year than we have taken in. A few days later Secretary Morgenthau of the Treasury Department testified before the Senate Finance Committee that this year's deficit would be nearly six billions. There is a difference of nearly three billions of dollars which we will leave to the two gentlemen to iron out. With the end of the year only forty-two days distant nobody now knows what the actual defi- cit is to be. To the makers of family budgets who are puzzled by a discrepancy of nearly three thousand millions of dollars in an estimate of one year's national budget I can offer one suggestion in explanation. The President was addressing a political meeting when he made the "low" estimate of three billions and his Secretary of the Treasury was making an argument for more taxes when he said six billions. It looks like a good spot for the use of a little horse and buggy arithmetic. YOU WILL NOTICE that we have rather abruptly got away from the modest dollar in the household budget to the billions in the public budget. Now a billion of anything is not to be measured by the ordinary mind. It is something to stagger the imagination. We know it is one thousand millions, but that doesn't help us much. Only nineteen years ago did Congress begin to make total appropriations of one billion dollars for all expenses of government for one year. The sum was so great that it was front page news. People called it "the Billion-Dollar Congress." This year you are spending about eight billions of dollars. As we said before, you owe thirty-one billions as a public debt. Let us apply the amount of your debt to something in concrete form to enable us, at least vaguely, to realize what that huge sum means. Last year the Government announced that there were upwards of seven million farms in the United States and it estimated their total value at nearly thirty-three billions of dollars. Now, if we were to sell all those farms at that valuation and turn the cash proceeds over to the United States Treasury there still would not be sufficient money to pay your public debt that will be owed at the end of next month. Tracing THE origin of your enormous debt we find that the root of it all is excessive spending. We cannot blame the unbalanced budgets on decreased income because for two years or more you have been turning over increasingly large amounts to your agents, the Government authorities, who handle your public business. You go further into the red each year because, while you have been paying more in taxes, the Government has steadily increased its spending. As a matter of fact, at present unofficial estimates, for every dollar you turn over to it the Administration is spending about two dollars. In other words, you entrust the Government with four billions and the Government spends eight. The Government winds up with a probable 1936 deficit of about four billion dollars. (We are not here following the divergent calculations of the President or of the Secretary of the Treasury.) Your Government has to borrow the four billions to keep the national household's current credit in working order. If the four billions is not paid back by means of more taxes or by rigid economies it is going to continue a part of the public debt. I wonder if it has occurred to you that the interest you pay each year on your public debt is about one billion dollars? That is something to think about in connection with the "Billion Dollar Congress" of a few years ago. Expenditures for next year are estimated to be even greater than for the present year. If present policies are followed there is no hope of any material reduction for 1938. During the fifteen-minute period in which I am speaking to you your Government is spending two hundred and twenty-eight thousand dollars. In these fifteen minutes your Government has gone one hundred and fourteen thousand dollars further into the red. You householders, in these fifteen minutes, have paid to your Government in taxes more than one hundred and fourteen thousand dollars. What are we going to do about it? We have only two things that we can do. It is not a situation in which we may say we shall try one 6 thing and if it does not work we shall try something else. You have got to pay more taxes and your Government has got to reduce its expenditures. You would recognize the way out of such a problem if it arose in connection with your household budget. There is nothing mysterious about Government debt-making and debt-paying. There is no sleight of hand trick by which we turn red into black. Spending and borrowing cannot go on indefinitely if your Government is to maintain its credit and its self-respect. WHEN WE APPROACH the subject of retrenchment we are brought square up against the problem of relief. Every humane consideration demands that whatever else we do, we must care for those who are in distress. I do not believe there is any man or woman of any class or group or creed or political party who would suggest that your Government economize at the expense of human lives, or that food, clothing and shelter should not be provided for those unable to care for themselves. Relief probably will be necessary for some time to come. In the opinion of some of us this device of work-relief has condemned itself. I, for one, favor using what Federal funds are necessary to help finance relief, but I believe the money could be used more effectively and far more economically if direct, actual administration of the job were left to the States. They, in my opinion, are in closer contact with their own problems than any Federal bureau can possibly be, and by sharing in the expenditures the States would have an incentive to make the money go as far as possible. I believe that boondoggling would be reduced, or eliminated. It is regrettable that some officials in high authority have acquired the habit of resentfully replying to criticism of waste and politics in relief by use of that ridiculous cry, "Ah, you are trying to drive suffering humans back into the soup lines!" If such stuff is deemed worthy 7 of any answer the answer might be that honest horse sense in administering relief funds means more relief for those needing relief. In the last three years about ten billions of dollars have been allocated for relief purposes. There are still twelve millions of unemployed and twenty millions are on relief. Isn't it about time to have some careful, non-political examination of the mess that has developed in the handling of relief? Mr. Roosevelt resents any suggestion of this from any source and proceeds to call those who propose it the creatures of entrenched greed. Mr. Roosevelt also demands that all relief money shall be turned over to him to spend as he pleases. There were some of us who argued in the spring of 1935 that under the terms of the decision of the Supreme Court in the Amazon Oil Case the work-relief appropriation act was obviously unconstitutional. You will remember that Congress in that act turned over to Mr. Roosevelt the gigantic sum of $4,880,000,000. And Mr. Roosevelt is spending this money exactly as he sees fit. One of the agencies he created was the Resettlement Administration with Professor Rexford Guy Tugwell at its head. In a case that arose in connection with that particular activity the Appellate Court of the District of Columbia, in a decision handed down yesterday, not only outlawed the Resettlement Administration but expressed the opinion that the whole work-relief act is unconstitutional. And yet Mr. Roosevelt is demanding that Congress appropriate to him in the same way and without restriction the further sum of one billion four hundred and twenty-five million dollars. WHOSE MONEY is this? It does not belong to Congress, it does not belong to Mr. Roosevelt. It is your money. You have to pay the taxes to raise it. You are burdened with the debt in connection with it. The value of anything you own is affected by that debt and those taxes. Isn't it about time you tell the Congress that is supposed to represent you that while you are wiUing to make any sacrifice to prevent suffering among the needy, you demand that your Government give heed to the same common sense economy that must govern your family budget? All of us will be willing to draw in the old belt another notch and pay any taxes necessary to get our Government back on a business-like basis. But we have the right to demand that those in charge of the Government budget shall turn from their reckless course and no longer waste our money in useless expenditures. The only possible source of revenue with which to meet the heavy obligations of which we have been speaking is your pocketbook. You must pay more taxes. You might as well face the fact. It is the inevitable consequence that after a period of reckless spending the American householder must pay the bill. You may be told that the rich wiU have to carry the greater share of the burden. That is not true. In bringing taxes up to a total of about four billions annually we have already put as great a load on wealth as it will stand, short of confiscation. It is you people with medium incomes and moderate savings who wiU be called upon to make these new sacrifices. You will be taxed by direct methods and by indirect. Income taxes must sooner or later be levied on a broader base, so as to include more people and smaller incomes. At THE DEMAND of Mr. Roosevelt a so-called tax bill recently was passed by the House of Representatives and is now under consideration in the Senate. It is not a revenue measure in the accepted sense. Its prime purpose is to regulate industry and business by compelling the distribution of reserve funds. It would dissipate those surpluses of which we spoke a few minutes ago. It would destroy ability to keep factories and mills open and men and women working in the lean years. It would increase the distress of any depression. And, on top of all that, it has been discovered that it would come nowhere near yielding the revenue needed or wishfully predicted. What your public budget needs is revenue. Experiments in social reform and continued interference with business will only further confuse your immediate problem. It is time to start toward balanced budgets. Both significant and hope-inspiring is the fact that although this latest bill was drafted under instruction of Mr. Roosevelt himself it was a group of Democratic Senators who exposed its fallacies and pointed out the dangers buried in its maze of words. Your debt is not essentially a partisan problem. It is a sum in old-fashioned arithmetic. One thing more. This tax hill of which we have heard so much recently seeks to raise about eight hundred million dollars. Let us remember that the Government could easily have that amount in hand by saving it out of your eight billion dollar budget. You owe thirty-one billions of dollars. You know what your own household budget is and how to manage it. Your privilege and your duty now is to assist in convincing your Representatives that neither a government, nor a family, can continue to pile up deficits and survive.