. . . "Broadly speaking, therefore, an increase of output
can occur only by the operation of one or other of three factors.
Individuals must be induced to spend more out of their existing
incomes, or the business world must be induced, either by
increased confidence in the prospects or by a lower rate of
interest, to create additional current incomes in the hands of
their employee, which is what happens when either the working or
the fixed capital of the country is being increased; or public
authority must be called in aid to create additional current
incomes through the expenditure of borrowed or printed money.
. . . "Thus, as the prime mover in the first stage of the
technique of recovery, I lay overwhelming emphasis on the increase
of national purchasing power resulting from governmental
expenditure which is financed by loans and is not merely a
transfer through taxation from existing incomes.
. . . "The set back American recovery experienced this
past autumn was the predictable consequence of the failure of your
administration to organize any material increase in new loan
expenditures during your first six months of office. The position
six months hence will depend entirely on whether you have been
laying the foundations for larger expenditures in the future."
