National Goals and Resources: The Longer Term Budget Outlook

Abstract

The Federal Budget for fiscal year 1973 estimates that the government will take in $220.8 billion in revenues for the 12-month period ending June 30, 1973, disburse $246.3 billion in expenditures, and incur a budget deficit of $25.5 billion. Administration supporters have praised the new budget as an important economic stimulus to expansion and yet are pleased to note that the projected deficit is $13.3 billion lower than that expected for the current year. Moreover, on a full employment basis (that is, assuming the unemployment rate were down to four per cent), the budget is estimated to be in balance. Critics have attacked the new budget proposals, some damning the large deficit, the third in a row, and some faulting the administration either for failure to propose bold initiatives addressed to urgent national priorities or for timidity in the amount of fiscal stimulus being provided to the economy. Both types of reactions may be short of the mark. Clearly, what the 1973 budget does do is to raise some key longer-term issues of public policy that are not likely to be resolved easily.