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price control standards, and in some instances they reduced slightly the prices of 1953 models.

Agricultural output for 1952 is estimated at a record level, 44 percent above the 1935–39 average and 3/2 percent larger than in 1951. (See appendix table B-17.) Production records were realized despite drought in large areas and a shrinking farm labor force. Indicated food production was up 4 percent from 1951, a large part of this gain being due to the big wheat crop, some of which went into reserve stocks. Cattle marketings rose substantially in the latter part of the year.

With the large volume of marketings, prices received by farmers in 1952 averaged almost 5 percent lower than in 1951, with rather marked declines in the latter part of the year. For 1952 as a whole, lower average prices for livestock products were only partly offset by slightly higher average prices for crops. Prices paid by farmers averaged about 2 percent above the level of 1951 and, with the reduction in prices received for their products, the parity ratio dropped from 107 percent in 1951 to 101 percent for 1952 as a whole. In December, the ratio was 96. (See appendix table B-25.) Government

The flow of goods and services to the government sector of the economy was almost one-fourth higher in 1952 than in 1951. This flow accounted for 22 percent of the gross national product in 1952, compared with 19 percent in 1951 and 14 percent in the period immediately preceding the Korean outbreak. More than four-fifths of the increase in governmental purchases in 1952 was attributable to the major national security programs. The next largest increase was in purchases of goods and services by State and local governments. (See appendix table B-1.)

Governmental cash revenues also increased in 1952, in absolute amounts and in relation to the gross national product. However, for the Federal Government as well as the State and local governments, the rise in receipts fell somewhat short of the advance in expenditures. The cash deficit for all governmental units combined was 3.1 billion dollars, divided about equally between the Federal Government and State-local governments. (See chart 18 and appendix table B–33.)

Federal fiscal operations. The results of Federal fiscal operations, as shown in the conventional budget, are summarized in table 4. Expenditures totaled 71.4 billion dollars in the calendar year 1952, and receipts 65.5 billion. The budget deficit of 5.8 billion dollars compares with a deficit of 3.4 billion in 1951. The sources of financing the deficit are indicated in table 4.

The public debt expanded from 259.4 billion dollars at the end of 1951 to 267.4 billion at the close of last year. Almost half of the increase of 8.0 billion dollars in public debt issues was taken up by the Government investment accounts which held 45.9 billion dollars of Federal securities at the year-end. (See appendix table B-30.)

CHART 18

GOVERNMENT CASH RECEIPTS FROM
AND PAYMENTS TO THE PUBLIC

In 1952, cash payments rose more than cash receipts, resulting in small cash deticits for both the Federal and the State and local governments.

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SOURCES: TREASURY DEPARTMENT, DEPARTMENT OF COMMERCE, AND COUNCIL OF

ECONOMIC ADVISERS.

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1 Gross receipts less appropriations to the Federal Old-Age and survivors Insurance Trust Fund and refunds of receipts.

? Less than 50 million dollars.
· Not excess of receipts over expenditures and investments of trust accounts, other transactions, and
clearing account.

• Public debt excludes guaranteed obligations, which total less than 50 million dollars.
NOTE.-Detail will not necessarily add to totals because of rounding.
Source: Daily Treasury Statement, Treasury Department.

The impact of Federal fiscal operations on the current flow of private income and purchasing power is shown more clearly when the conventional budget accounts are adjusted to a consolidated cash basis. Two broad types of adjustments are involved: first, the elimination of noncash transactions, such as interest accruals on outstanding U. S. savings bonds, interest on securities held by the trust accounts, and transfers to the trust accounts; and second, the merging of the budget accounts with the trust and miscellaneous accounts. The result of these adjustments is a consolidated statement of all cash receipts from and payments to the public, apart from sales and redemptions of Government securities. (See appendix tables A-6 and A-7 for a statistical reconciliation of the conventional budget and consolidated cash figures.)

As shown in table 5, both receipts and expenditures are higher on a cash than on a budget basis. The difference, however, is considerably larger in the case of receipts, chiefly because the substantial tax collections for the social security funds are much in excess of expenditures therefrom. The cash deficit of the Federal Government was 1.6 billion dollars in 1952, or 4.2 billion less than the deficit in the conventional budget. There were cash surpluses in both 1950 and 1951, although the conventional budget showed deficits during these years.

Expenditures for national security. The major national security programs (including military services, international security and foreign rela

TABLE 5. Federal receipts and expenditures: Conventional budget and consolidated cash

statement
[Billions of dollars)

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tions, atomic energy, promotion of defense production and economic stabilization, civil defense, and merchant marine activities) accounted for 71 percent of total budget expenditures in calendar year 1952. In the preceding year they were 65 percent of the total. Although national security expenditures rose from 37.1 billion dollars in 1951 to 51.0 billion in 1952, all of the growth occurred in the first half of the year. (See chart 19.) The data given in table 6 show that during the second half of the year these expenditures were about 800 million dollars higher than in the first half.

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1 Estimates based on incomplete data. 2 Includes foreign military assistance.

! Includes economic and technical assistance, Export-Import Bank, State Department, and miscellaneous foreign aid and relief programs. Foreign military assistance is included with Department of Defense.

• Includes maritime activities, promotion of defense production and economic stabilization, civil defense, National Advisory Committee for Aeronautics, and the Selective Service System.

NOTE.-Detail will not necessarily add to totals because of rounding.
Source: Daily Treasury Statement, Treasury Department.

Other budget expenditures. Veterans benefits were somewhat lower in 1952 than a year earlier. On the other hand, interest on the public debt was slightly higher. The increase in expenditures of the Commodity Credit Corporation accounted for about half the rise in the "all other" classification shown in the table.

CHART 19

FEDERAL BUDGET EXPENDITURES
The rise in total budget expenditures since 1950 has been almost
entirely for major national security programs. Expenditures for
all other purposes have been relatively stable.

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Budget receipts. The advance in budget receipts in calendar year 1952 was due to the over-all expansion of business activity and the tax legislation enacted in 1950 and 1951. (See table 7.) Each of the major sources of tax revenue was affected by the legislation. The increased withholding rates for the individual income tax under the Revenue Act of 1951 became effective in November 1951, as did the excise tax changes made by that Act. In the case of corporate taxes, the full increase imposed by the 1951 Act will not be reflected in receipts until March 1953, when most corporations will make their first tax payments on their profits for 1952. Corporate tax payments during 1952 were based for the most part on profits and tax rates in 1951.

Because of the 1951 rate increases for the individual income tax, and the rise in incomes, the percentage of personal income withdrawn by direct Federal taxes on individuals rose to 11.4 percent in 1952, according to the

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