Show I About Trick rick Bookkeeping By Bv JOHN T T. T FLYNN NEW YORK YORK Apparently Apparently some people are sold on the the- idea of the new trick bookkeeping which the president is playing with in order to abolish the deficit Readers write to defend the plan But they overlook a most important factor The plan is to keep the government government government govern govern- ment books in such a way that all expenditures for the current operation operation operation op op- op- op of the government would be put down as expenditures but all expenditures made to increase the plant of the country would be called investment and not nat ex ex- In other words if a corporation expends a million dollars to run its business and borrows a million to build a plant that milli million n is not called an expenditure but an in in- in vestment And so if the corporation corporation corpora corpora- corporation tion has receipts during the year of then it will not be said to be in the red because it spent Half of this would be called investment Fallacious Reasoning In the same way it is said if the government puts out money on its plant in such a way as to increase the earning power of the country then the money thus spent should be called investment and not cx- cx ex ex- In looking this over the citizen should be careful to keep leep in mind the difference between the government government gov gov- and the country They are not the same The country in includes in- in includes eludes all the people The government government government gov gov- gov- gov is merely one public agency set up to serve all the people in certain very limited areas Everything that belongs to the government belongs to the people But everything that belongs belongs belongs be be- longs to the people does not belong belong belong be be- long to the government If we were to keep a set of books on the business affairs of the people as a whole the asset side would include all the wealth the liability side would include the I total obligations The income side would include the total income and so on But when we are keeping keeping keep keep- ing books on the government the asset side includes only what the government owns and the liability side only what the government owes ewes The income of government is what the government takes tales in its expenditures what it pays out It is like a great public corporation corporation corporation cor cor- organized to perform c certain r- r tam tain important services for all alt the people It has only one source of I 1 taxes evenue-taxes taxes and penalties However the government go into business It may build a power pow pow- er cr plant and sell power It may build and operate a railroad In that case it has a profit as part of its income It may lend money as asit asit asit it does docs in the R F C and then it has interest as its income Now when a a. government lends money and the loan is appraised as sound it is entitled to put that down as asan asan asan an investment The interest will come to the government The government government gov gov- gov- gov can use it any way say it wishes Improvements Belong to Owner 0 But when the government performs performs performs per per- forms some services for its citizens citi citi- zens zens-as zens as for instance when it helps farmers to improve their land the land the improvement in the theland theland theland land belongs to the farmers not the government An electric light corporation furnishes me with power The power enables me to tomake tomake tomake make a great deal of money But because my utility company helps me to make money it will not be justified in putting down the Increase in increase increase in- in crease in the value of my factory as an asset It is the same with the government Of course the improvement in inthe inthe Inthe the farmers' farmers land may enable the farmer to make more money and thus enable the government to ex- ex more taxes from him It is assumed and it is a a. fair assumption assumption assumption tion that all government expenditures expenditures expenditures expendi expendi- tures as a whole add to the value of the land and the taxable potentialities potentialities poten poten- of the population A cit city builds a school and firehouse and immediately the land values of the neighborhood rIse But the city cannot add these land values to its corporate assets and include them in its books even though it i is able to tax more All th these se government expenditures expenditures expendi expendi- tures may be justified in the case of the school and firehouse but bu that is no reason why a city should fool itself and monkey with its books to complete the delusion Cop Copyright right 1938 for The Telegram |