The Cost of Democracy

Abstract

Our concern in this volume is the financing of democratic government and coping with the problems arising therefrom. The widening influence of government programs and finances is everywhere apparent. Wars and vast social changes have plunged the nations into heavy government spend ing on both the domestic and the international fronts. Pres ently, we are living in an era of social, political, economic, and financial crises. As a result of long-continued and recent pres sures, American governments will spend approximately $260 billion this year on numerous programs. Of this huge sum, the federal government will spend $185 billion, of which over $76 billion may be devoted to national defense. Total tax payments this year are estimated at $218 billion. Taxes in this country and in other countries have long been rising in relation to gross national product (GNP), as government ex penditures have increased faster than population, income, and prices. Inflation has spread over the world. Government defi cits have been an important contributing factor. Now prices are rising at a faster rate in this country. We have not yet found a way to control inflation. The central problem of gov ernment finances is control of government programs, and of expenditures upon them, to make certain that our resources are utilized to best advantage in their allocation to public and private uses. Social progress and economic growth should be promoted without causing mass unemployment and depression and also without incurring fiscal debilitation through inflation.