The following is a statement issued by Herbert Hoover’s White House on 2 June 1931 regarding the federal budget deficit for the year. I have highlighted the parts most relevant to today’s situation.
IN REPLY to inquiries from the press the following information in round numbers has been furnished by the Director of the Budget as to the economies made during the past year and the probable fiscal situation upon July 1.
Present indications are that the financial transactions of the Government for the fiscal year ending June 30, 1931, will show an increase of about $500 million in the national debt. The deficit is from about $900 million to $950 million, of which about $440 million will be due to the statutory redemption of the debt.
The deficit is principally due to a falling off in receipts of the Treasury, from taxes and other sources caused by the depression which will apparently be about $840 million below the fiscal year ended June 30, 1930. Added to this is the additional burden of about $50 million fall in postal receipts.
There have also been large increases in expenditures for construction work and agricultural relief and for veterans’ services amounting to about $540 million above that of the last fiscal year.
These figures alone–a reduction of $890 million in receipts and an increase of nearly $540 million in expenditures in the above items-would indicate that the Government would be over $1,430 million worse off this year than last.
However, deferments and reductions in expenditures in other parts of the Government largely due to the economy drive last summer amount to about $180 million. During the fiscal year ended last June the debt was reduced by $305 million in excess of statutory amount while this year it is held to the legal requirements. These two sums make a difference in the situation of about $485 million and result in a final deficit of about $900 million or $950 million.
As stated, of this deficit of $900 million or $950 million, about $440 million will be expended in the statutory redemption of the public debt so that the net increase in the debt for the fiscal year will probably be about $500 million.
The Administrator of Veterans’ Affairs reports that the loans so far made upon bonus certificates now total $1,098,947,000 to 1,971,966 individuals of which $284,481,000 has been furnished from insurance and other funds, about $60 million from the banks, and $754,466,000 from sale of Treasury obligations.
Source: The American Presidency Project, UCSB