Arecent newspaper paragraph reveals that statisticians have completed a survey of the mental capabilities of the American people and have come to the discouraging conclusion that one per cent of our population are morons. Based on a population estimate of 120 million individuals, these statistics would indicate we have well over a million morons numbered among our friends and neighbors in the United States. Personally, if this situation exists, I feel certain that this estimate most also include those who are alarmed by statistics cited in support of economic theories. That fairly sums up what I think of statistics and statisticians, and our professional economists who quote statistics to confirm the logic of their conclusions.
Every book, every magazine and every newspaper today offers a variety of causes for the depression and a thousand and one theories that are guaranteed to save the United States from complete collapse economically. The air lanes are loaded with oratorical panaceas and cure-alls. Nine out of every ten people you meet on the street can point out one hundred different weaknesses in our present economic system. At least eight out of these nine are voluble disciples of some different school of thought.
During the past few years I have traveled this country from stem to stem. As a lecturer I have addressed probably several hundred thousands people, including those who membership in Rotary Clubs and Chambers of Commerce, as well as those who might be classed as charter members of the so-called masses. The majority of my audiences have been composed of former sliders. This means I have been speaking to a cross-section of America’s citizenship, because when Uncle Sam decided to equip his male population with uniforms and markets, back in 1917, he took his recruits from the counting houses, as well as the factories.
In keeping with an insatiable desire to know what the average man’s thought are on the popular questions of the day. I never passed up an opportunity that might help me in my personal survey of conditions in different sections of the country people everywhere have been grist to my mill--newspaper publishers, farmers, bank clerks, shop-keepers, cotton growers, manufacturers, and those who are working as well as those who are unemployed.
As a result of these interviews, I have reached one definite conclusion. If one percent of our population are morons, as the statisticians contend, then the remaining ninety-nine percent of our people are suffering from an epidemic of delusions that threaten to tear down the moral fibre and character of the American people, unless something happens in the near future in the form of industrial recovery.
I am not trying to solve an economic situation that is without parallel in the history of this country. But I am convinced that we will accomplish little or nothing toward the goal of preventing our economic difficulties after this depression has been put to rout until the people of this nation decide to face the facts and recognize truths as they actually exist. Ever since 1929, when we learned to our dismay that there is nothing permanent in prosperity builded upon a synthetic foundation, we have been trying to find some get-rich-quick method of defeating the depression. We have been bombarded with hundreds of different schemes and theories, all of them designed to over-come the evils of hard times without taking into consideration the causes.
Despite all the recovery measures being ballyhooed by the Longs, Coughlins, the General Johnsons, the Townsends and the Liberals and the conservatives, of both the Democratic and Republican parties, I maintain that the major evils that exist today will never be eliminated until the American public regains its common sense and quits kidding itself in anticipation of miracles.
I wear no collegiate cap and gown, and I possess no degrees that might identify me with professional wisdom. I know practically nothing of the scientific theory of economics. My knowledge of the mysteries of monetary manipulations is confined to marine corps pay checks, my monthly domestic bills and household mortgages. In fact, it is the absence of these qualifications and these collegiate degrees that qualify me—in my opinion—to express my views on this particular subject. My vision has not been beclouded by the scientific conclusions of students whose practical experience has been confined to the perusal of ponderous tomes written by students before them.
In 1917, the total gross public debt of the United States was less than 3 billion dollars. The public debt per capita was $28.57. By 1932, the public debt had increased to nearly 20 billion dollars, with the per capita debt increased to $155.85. By the close of the present fiscal year, federal treasury authorities state that our public debt will reach a total of approximately 30 billion dollars. It requires no economic brilliance to understand why taxes are high when our public debt is high – or vice versa.
According to all reports on November 11, 1918, Germany lost the world war. But today the per capita public debt in Germany is only $37.65 while in the United States it is $64.09. It would certainly appear from these figures the report of Germany’s defeat was grossly exaggerated.
Before business conditions went hay-wire, back in 1929, our national income amounted to 90 billion dollars. With an income of 90 billion dollars, a tax bill of 10 billion dollars was no serious drain on the pocketbooks of the American people. But when that income is reduced by one-half, and our tax bill jumps to its present status of 15 billion dollars, the circumstances are something to worry about.
Fundamentally, Uncle Sam is merely the head of a household. His problems, on a larger scale, are identical with yours and mine. The moment we, as individuals, permit our expenditures to exceed our incomes, we invite grief. The average man learns from and experience that a beer income is insufficient for champagne tastes. The thrill of “keeping up with the Joneses” can only be temporary, because sooner or later the sheriff or the wolf is waiting at the doorstep. Our politicians and our economic experts may be able to cite a thousand different reasons for our present plight. They can probably likewise suggest a thousand different economic prescriptions. They can point to statistics from here to the moon, and recite theories from now until Doomsday, but unless they recognize that neither Uncle Sam, nor anyone else, can perform the miracle of spending more than he earns—they are wasting their ammunition with a barrage that is landing far beyond far beyond its target.
Obviously, the tremendous burden of taxation required by the federal government is the first result of a deficit in the federal treasury. Heavy taxation, far beyond the tax limits of the average individual income, creates a similar deficit in the bank accounts of the Americans people. If we can reduce taxes to the point where they should be, in proportion to our national income, we will release the brakes on the machine of national recovery and once again the wheels will turn under their own motive power.
Unfortunately, Uncle Sam is hardly in a position to reduce taxes while his overhead expenses are still soaring to the heights. The government must have funds with which to function or it faces bankruptcy. Here is the point I seek to establish. The Americans people themselves are primarily to blame for the bills Uncle Sam is forced to meet today. Back in the days of easy money, we clamored for fine roads, elaborate public buildings, improved harbors, palatial post offices, federal subsidies for the development of aeronautics, and numerous other luxuries that our fancies or whims suggested. Much to our chagrins, we have discovered that these governmental favors and services must be paid for and maintained, even though surpluses become deficits and the national income is reduced by fifty percent. In other words, we, as individual citizens, have ignored the fundamental principle that the piper always wants his pay and that there is only one sure-fire method of keeping out of debt. Pay as you go!
The fad of the moment is to blame congress for all the ills that beset the American people. Congress, as a group, is an abstract body and any orator can direct his shafts at the House of Representatives, or the United States Senate, without much fear of reprisals. Of course, this hardly applies to public officials, because members of congress are naturally resentful of criticism coming from any other individual who is also on the public payroll.
I hold no particular brief for members of Congress, aside from the fact that they are ordinary human begins, endowed with the average amount of intelligence and the same impulses and instincts that motivate the thoughts of the average man or woman. The career of a Congress member after all, is no different than the career of any other business man. Every doctor, lawyer, professional soldier, merchant, farmer, and manufacturer is in reality a business man. Each is engaged in the business of earning a livelihood. Likewise, the art of being a politician is also a business. These men are selling their services as representatives of their constituents. If a majority of a Congress member’s constituents demand that he vote favorably on a pending appropriation bill, he can either set accordingly or to be prepared to return to civilian life. There are probably a few members in congress who are situated solely by an unselfish desire to serve the nation as a whole. But the rank and file of these men, most of whom are lawyers, have practically abandoned their private enterprises and have no other major source of income aside from their salaries as either senators or representatives.
In other words, the politician is not the man to blame for our present terrific tax bill. He only favors an appropriation when he feels his supporters demand either his vote or his resignation. Politicians, including the man who hold public office in cities, countries, states—as well as those in congress—have only been doing what they have been forced to do by public sentiment and by the pressure exerted upon them by organized groups of voters. If the politician is guilty of a crime, he is guilty of doing exactly what thousands of others would do if they were in his position. He has been holding on to the only job he has.
There are those who tell us that we can never achieve progress or development—either as a nation or as individuals—until we go into debt. I might agree with this theory, to some extent, but when this debt grows beyond the proportions of reason and sound economics, the theory falls of its own weight. Progress is futile if its benefits are not permanent.
We—the people of American—must come to our sense. This is still the government of Abraham Lincoln’s day—of, by and for the people. America must go forward. American will go forward. But let us go forward with the deliberate knowledge that our foothold on the ladder of progress is secure. Let us practice as a nation, the good judgment and sound business principles, that each of us must adhere to as individuals if we wish to avoid financial ruin. We can achieve this through our own efforts if we will stop to remember that we are the ones who must pay the bill and that the luxuries and benefits of progress and development will never be permanently ours until we can pay for them with the cash in hand. Let us desist in our demands for appropriations from public funds until we have surpluses that will pay the costs.
Business and industry can never prosper under the yoke of terminal taxes. Remove this yoke and the people themselves will be freed of the one big burden that creates poverty and unemployment.
We can change, revise and modify our present system of taxation to our heart’s content. Personally, I am convinced that certain changes are absolutely essential. I have always held the opinion that those who derive the most from the benefits we enjoy, under our form of government, should contribute the most toward its maintenance. To be specific, I believe in graduated income taxation, inheritance taxes, gift taxes and an adequate levy of taxes on public utilities and those large corporations that would find it impossible to build up such surpluses in any other country. In other words, those who profit the most by government preferment, aid, federal tariffs and protective legislation should contribute the most toward paying the cost of government.
In emergencies, Uncle Sam—as a private individual—should be able to mortgage his holdings or his accumulation of wealth. It is perfectly logical for Uncle Sam to borrow on his financial standing in order to weather the storm of a depression or any other economic crisis. At the same time, even during this borrowing process, Uncle Sam should take steps to pay back the money that is borrowed by tapping the great depositories of accumulated private wealth. We, as individuals, strive to leave this life without passing the burden of family debts to our children. Likewise, I believe that the federal government should conduct its economic affairs in away that will guarantee freedom of debt for the generations to come.
My views on the subject of taxation should not be confused with those of politicians who preach “seek-the-rich” merely as a vote getting slogan. I refuse to abandon the principle that all of us, regardless of how rich or how poor we may be, are indebted to the government itself for certain benefits that all of us enjoy. Therefore, I believe that each should bear his proportionate share of the cost, based on his ability to pay and the size of his purse. And when this country is in the grip of distress, those who possess the greatest surpluses of wealth should be required to contribute the most toward wiping out existing deficits.
However, revision of our tax system will by no means bring a complete solution to America’s problem. Our troubles will still be with us if we continue to ignore the basic principles of simple economics. No man has ever acquired prosperity and comfort by spending more than he earns. It is folly for us, as individuals, to think that the federal government can accomplish such feats of magic. Ruinous taxes will continue to be the underlying cause of unemployment, and a constant drain on the resources of business and industry, as long as the people of this country ignore the feat that none of us can ever hope to get something for nothing. We, the people, must foot every bill incurred by Uncle Sam. As long as we forget this obvious feat, and until we modify our demands upon the federal government, and public officials, in keeping with our ability to pay the cost involved, we can hope for nothing but continued distress and painful deficits.