About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 Federal Expenditures: Evaluating the Issues 1 (1963)

handle is hein.tera/fexitngis0001 and id is 1 raw text is: FEDERAL EXPENDITURES: EVALUATING THE ISSUES Summaries of papers presented at Tax Foundation's 16!h National Tax Conference at the Hotel Roosevelt, Deceinber 3, 1963. Full texts of speeches are available on request from Tax Foundation, Inc., 50 Rockefeller Plaza, New York, N. Y. 10020 The Central Issue By GORDON GRAND, Chairman On behalf of the Tax Foundation, I want to wel- come you to our 16th National Conference, the first of which was held in 1940, when the Tax Foundation looked at wartime financing, the excess profits tax and war taxes. We have held these conferences since that time as part of our program of bringing research and education in the fiscal field to the American people ... The purpose of the Conference today is to look ahead at the main fiscal issue facing the country-the question of Federal expenditures. Five clearly discernible facts seem relevant to this conference: (I ) There is unanimity of opinion on the need for tax reform; (2) A serious effort is being made to relate taxes and expenditures; (3) If the next deficit is a modest one, the prospect of a balanced budget in later years outweighs the disadvantages of such a deficit incurred as a result of tax reduction; (4) President Johnson will be unable to modify substantially the budget for fiscal 1965 before its presentation to Con- gress next month; and, (5) Congress is faced with a clear issue: to what extent should tax reduction be financed by borrowing? With this in mind, today's speakers will bring their knowledge and insight into the impact on the economy of government expenditures, ways and means of con- trolling those expenditures and the question of the impact on inflation of higher expenditures. GORDON GRAND, Vice President and member of tie Board of Directors of Olin Mathieson Chemical Corporation, is Vice Chairman of Tax Foundation. A graduate of Yale and Harvard Law School, lie was Republican counsel to the House Ways and Means Commit- tee from 1948 to 1952 and clerk of the Committee in 1953. He is author of The Federal Legislative Process. Federal Spending as an Economic Stabilizer By WAL'rER D. FACKLER Federal spending policy has not been an effective short-run economic stimulant in periods of economic slack nor a depressant in periods of inflationary pres- sure. The simple spigot theory of expanded government spending in recession and reduction during periods of inflationary exuberance has lost its charm. Since government spending is only one of several policy variables, and not the easiest to manipulate, the debate now centers on the appropriate fiscal-monetary mix. How should spending policies be fitted into the total scheme of things-Federal Reserve monetary pol- icies, tax policy, debt management and international financial transactions? Which of these stabilizing devices are substitutes or complements for each other? Which should be adjusted or kept constant? The issue is 'not whether Federal expenditure policy will influence economic events, but whether that in- fluence will be bad or good. The fiscal issue is whether government expenditures should be jockeyed about in response to changing economic circumstances, or serve as a reasonably firm part of the framework within which other policies operate. Only a small ininority believes that it is possible or desirable for the Federal government to balance its budget each and every year. But the annually balanced budget dictum is a simple and important rule of cost- that when resources are transferred from private to public use, they should be paid for honestly, openly and fully. Considering mankind's long experience with fiscal chicanery, it's not a bad idea-only an unwork- WALTER D. FACKLER, Associate Dean of the Graduate School of Busi- ness, University of Chicago, has writ- ten extensively on economic stability and government spending. He has taught economics and public finance at - George Washington and John Hopkins universities and was assistant director of economic research for the United States Chamber of Commerce from 1956 to 1959. able one. Debt-financed government expenditures are no more inflationary than tax-financed expenditures as long as funds are borrowed in the open market at un- pegged rates of interest. But historically, past deficits (at home and abroad) often have been financed by inflationary methods or have led to inflationary policies

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most