Abstract
I already mentioned that the budget receives loans (outright credits) from Gosbank and uses them to cover its deficit. In this chapter we are to make the final calculations, to substantiate this conclusion, and to explain its importance. But before this let us review some results of the entire foregoing discussion.
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Notes
CIA, The Soviet, 1977, p. 23.
I already mentioned in chapter IV (note 6) that Cuba receives aid from the USSR to the amount of 6 million dollars daily—too much to return.
As already noted in chapter IV, according to M. Atlas, Natsional’nyy, 1977, p. 327, during the twenty years 1955–75the USSR granted 15 billion rubles in credits to “the fraternal socialist countries.”
As I have already noted in chapter IV, according to Zlobin, Finansy, 1967 p. 251,there was (and it is quite possible that there still is) a practice of using the reserve funds of Gosstrakh, and thus the increases of these funds are treated as budget revenues. Generally speaking, the operations of Gosstrakh are increasing very rapidly, but not so rapidly that they would explain the amounts of the deficit that we obtained in table X-1, especially for the last few years.
This point was made by A. Bergson. Methodologically he is absolutely right—when as the result of complicated economic calculations we obtain relatively small figures, a possibility of mistakes is the first thing to think about, but in fact the deficit does exist.
There are republic (as well as oblast) offices (kontory) of Gosbank.
For example, in 1975 305million rubles were transferred from the union budget to the republic budgets. In addition 7.804 billion rubles were also received by republic budgets and 1.113 billion rubles were transferred to the union budget in counterflows. In 1970,all these amounts were even substantially greater (Byudzhet 76, pp. 75 and 77).
Stroybank and Vneshtorgbank perform their operations with the budget through their own accounts at Gosbank.
Sekretariat, Statisticheskiy, 1974, p. 60.
I met a Hungarian economist in Washington a few years ago, and he told me that the budget borrows money from the bank. The fact that he told me this shows that this is done there openly.
Yevdokimov, “O klassifikatsii,” 1976, p. 37.
Yevdokimov, “O klassifikatsii,” 1976, p. 33.
It is nevertheless worth noting that in Massarygin, Finansovaya,1968, p. 25, the author reasons that the Soviet state “has the opportunity… using credit resources to increase the assets of the state budget.” However, this can be understood in such a way that the author is speaking about loans from the population.
On the other hand, it is very easy to find examples in which Soviet authors write an obvious (perhaps nevertheless only for us) lie. “… the credit nature of Soviet money is determined by the fact that its emission (placement into circulation) is only of a credit, but by no means of a budget nature. This means that Soviet money is emitted for the advancement of the circulation of assets, and not for the implementation of budget expenditures, not for covering a budget deficit” (Levchuk, Gosbank,1977, p. 35).
Dan Gallik asked me this quite natural question.
In particular, as M. Feshbach showed me, even data on the expenditures on the MVD were published.
Liberman, Gosudarstvennyy,1970, pp. 269–70.
Possibly the post-Stalin team could “loosen the belt” a little, while the postKhrushchev team, as far as we are aware, consolidated its position very slowly and prudently, but a budget deficit is not a very prudent measure. Interestingly enough, the sharp decrease of the deficit in the 1960s coincides with the abolishing of the use of deposits in savings banks as a budget revenue (see below).
Narkhoz 65, p. 761; Narkhoz 78, p. 521. These figures do not include the working capital of kolkhozes.
Usually both Soviet and Western literature take into account only unfinished construction itself-99 billion rubles by the end of 1978 (Narkhoz 78,p. 351; it does not include the unfinished construction of kolkhozes). But the so-called unfinished construction production (nezavershennoye stroitel ‘noye pzoizvodstvo) has the same economic meaning—by the end of 1978 it was 34.3 billion rubles (Narkhoz 78, pp. 521 and 527).
I will repeat that it is by no means of little importance in this connection that the USSR has a large foreign debt as well.
Barkovskiy, “Problemy,” 1977, p. 50.
Narkhoz 78, pp. 138–39.
Belkin and Ivanter, “Finansovyye,” 1977, p. 64.
Fedorenko, et al., “Parametry,” 1978, p. 2.
Shvarts, Beznalichnyy,1963, p. 29 ff.
Garbuzov, “Resheniya,” 1976, p. 6.
Indeed, military hardware produced is included in the total amount of gross social product and national income.
I use just these indicators here and not Western calculations of Soviet GNP first because I use in this work only Soviet statistics and secondly because these Western calculations are not completely reliable (see “Conclusion”).
Gross social product in current prices in 1978 was 845 percent of 1950, and national income was correspondingly 772 percent (table X-4). According to Narkhoz 78,p. 33, these figures (presumably in constant prices) are respectively 791 and 808. There is some puzzle here, but generally speaking it implies that for 1950–78 the overall price level did not change substantially.
Here only the growth of unfinished construction production, and not unfinished construction is taken into account.
Narkhoz 55, p. 29.
Note that the very rapid growth of capital investment is also greater than the growth of other indicators. Among other reasons, this shows that inflation in the area of capital investment was especially high.
Melkov, Kreditnyye, 1969, p. 118.
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Birman, I. (1981). Bank Loans to the Budget. Inflation in the Noncash Sphere. In: Secret Incomes of the Soviet State Budget. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-9427-3_10
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