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11 Tax Review 1 (1950)

handle is hein.tera/tafoutaxt0013 and id is 1 raw text is: TAX IREVIEW JANUARY 1950, Vol. X1, No. I Published by The Tax Foundation, Inc., 30 Rockefeller Plaza, New York 20, New York 0 0 0 0 0 0 0 0 000 C 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 Government Fiscal Policies and Their Consequences A Fear Stage, Not a Stimulative or Incentive One, May Result if a Policy of Deficit Financing Is Continued by EDWIN G. NOURSE IN TRYING to answer the question what government fiscal policies really are, what sort of fiscal world we are going to live in in 1950 and in the years that follow 1950, we want to keep it clearly in mind that the fiscal policy of this government is not something which is drawn up by one individual and then carried through just as he would like to have it carried through. Under our method of government, we have accentuated the differentiation and the rela- tionship between two sources of public policy, an Economic Report of the President which sets forth his economic statesmanship, includ- ing his fiscal policy. This report is referred to an integration body of the Congress, the Joint Committee on the Economic Report of the President. We have a very able group of men there now and I think the shaping of economic policy, inclid- ing fiscal policy, will be better done by the infu- sion of intellectual and bi-partisan elements pro- vided through this Joint Committee. While I don't think you can get the political element out of the picture, there seems to be a tendency to get more objective consideration from the legislative side. The economic analysis and the general program presented in the Economic Report is first developed on the executive side, then paralleled by a budget message and a report of the Budget Bureau, pre. senting the executive proposals for fiscal policy. The budget, also, under the new system is sup. posed to be re-worked into a comprehensive legis. lative budget. That is quite a struggle and the practice is still far below the theory. In the 25 years of the Budget Bureau we have gotten somewhat away from the hit-and-mniss method, but there is still very great difliculty in getting an integrated view of the budget as a Copyrigt 1950, b~y Tax F'oundation the executive and the legislative. Now we have guide to legislation. Any attempt at legislative rationalization of the budget tends to break down andi we end up, as we did this year, when the legislature first made a loud outcry against the size of the executive budget, and then, instead of submitting itself to strict discipline under a legislative budget, wound up, by the gradual process of addition from special sources, with a budget even higher than that of the President, The Effect of Surpluses Now as to what the government's fiscal policy actually is at the present time. The President says lie is concerned about a balanced budget. Also lie starts with the assertion that his fiscal policy is based on a concern for the welfare of the whole country and a belief that the welfare of the whole country canl be advanced only through adhering to the principle of a balanced budget. As a principle. that is excellent, and I think we can go along with him also whlen lie adds that, as a matter of practical economic statesmanship, you can't hold to a rigid principle of balancing the budget every year inl tile operation of a coul- try. Not any more than you can balance your family budget every year. You must take a broad look and a long look. You must have a fair weigh. I

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