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December 17, 1933*

The Federal budget, unlike that of an individual or corporation,
cannot, or rather should not, be considered by and of itself without
reference to the budget of the whole American people* This follows
from the elementary but frequently forgotten fact that the national
government is not a privately owned corporation but is the instrumentality of all the -American people* Consequently, in approaching
the Federal budget, primary consideration must be given to the economic
necessities of the country.
If what the American people need is jobs, better education, health,
security and a higher standard of living, and if there is available
man power, knowledge and resources to supply these needs, then it is
the duty of Government to insure that these needs are actually supplied*
This principle has guided my Administration since 1933. We have
tried to ascertain and meet the primary needs of our people and we
will continue to try to do so*
There are those who do not deny the existence of pressing economic
want HOT the desirability of meeting it, but who nevertheless feel we
cannot afford it* They point sot to a shortage of plant capacity and
man power, but to the high level of Federal expenditures, to the sucession of deficits and to the growth in the public debt* They have convinced themselves, against both the dictates of ordinary canmon sense
and advanced economic reasoning, that any expenditures of the Federal
Government not financed out of current taxes are unsound and dangerous*




These people are unaware that an indispensable condition of a
progress!re economy is that money must be kept at work* This means
that as long as there is saying out of current income these savings
must be borrowed and spent if the stream of purchasing power is not
to be reduced*
Debt creation and wealth creation have proeeeded hand and hand
throughout our history* At such times when there was no demand nor
outlet for current savings, our economy stagnated or regressed* The
very people who condemn the government for incurring debt when it
builds houses or roads or sewer systems, praise private corporations
for making investments when they do essentially the same thing* We
must not let ourselves be deceived by such verbal tricks*
A major part of our recovery efforts has consisted in meeting
the primary essential economic needs of the American people and, in
so doing, putting new money and idle savings to work* These efforts
were crowned with such success that in the year 1957 there was added
#30 billion to our collective incomes over what we made in 1932*
We thought it then safe to withdraw Government support* It did not
prove so* The Government9 thereforef again stepped in and with
most gratifying and immediate results* Buying power and consumption
were prevented from going into the tail spin of 1929*32 and production
quickly revived*
Although we have had a gratifying degree of recovery the
national income and employment are still too low* It continues




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necessary to offset the failure of industry to provide an outlet for*
savings; to build up buying power to a point where industry will again
find it profitable to borrow and expand*

This time, however, owing

to our prompt action in 1938, we start at a much higher level and we
can look forward to a far more rapid revival in private borrowing•
When and as private debt creation provides a sufficient outlet for our
savings, the resulting high national income will make it easy, as well
as safe, to discontinue Government borrowing•
As for the burden of the debt, let me call your attention to the
fact that total debt, both public and private, is today no greater
than in 1929; whereas the interest charge is very much less. In
other words, the burden of the debt today, in relation to our resources
and manpower, is substantially less than in 1929*