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that was in eruption before its eyes, turned to the very thing it denouncedin Hoover. But there was a difference. Hoover's deficitswere the result of failure of revenue and were unplanned. Mr.Roosevelt's first deficit was a deliberately planned deficit. Withina few months of his inauguration he approved a proposal for a$3,300,000,000 public-works expenditure with borrowed funds inthe NRA Act of May 1933. He then turned in the following deficits:$3,255,000,000 in 1933-34; $3>7 82 > ooo > oooin !934¯35î $4>782,ooo,-000 in 193 5-36; and $4,952,000,000 in 1936-37.Nevertheless, despite this record, the administration persisted inits theory that budgets should be balanced. Its platform in 1936said:We are determined to reduce the expenses of the government. . . . Ourretrenchment, tax, and recovery program thus reflect our firm determinationto achieve a balanced budget and the reduction of the national debtat the earliest possible moment.In January 1937 the President triumphantly presented whatlooked like a balanced budget. He said:We shall soon be reaping the full benefits of those programs and shall haveat the same time a balanced budget that will also include provisions forthe reduction of the public debt. . . . Although we must continue tospend substantial sums to provide work for those whom industry has notyet absorbed, the 19} 8 budget is in balance.The whole tone of this message was pitched on the growing importanceof a balanced budget. Nevertheless, notwithstanding thisamazing statement, the budget of that year was not in balance. Itshowed a deficit of $I,449>62É>,OOO. Immediately there was a tremendousdrop in the rate of business activity. We began to havewhat was called a recession, while the President continued to talkabout "the extreme importance of achieving a balance of actualincome and outgo." I recall all this now in order to make clear thatup to this time no party in this country seriously approved the practiceof borrowing as a definite policy. I think it illustrates also withcomplete finality that the men who were guiding national policyknew nothing about the workings of our economic system. The176