1950 - 1975
During the 1960s the United States experienced its longest uninterrupted period of economic expansion in history. In the 1960s housing and computer industry overpowered automobiles, chemicals, and electrically powered consumer durables, which were the leading sectors in the 1950s. Big business dominated the domestic economy during this time. In 1962 the five largest industrial corporations accounted for over 12 percent of all assets in manufacturing. By 1965 General Motors, standard old of New Jersey and ford had larger incomes than all the farms in the United States. America’s overseas investment increased to $49.2 billion in 1965.
After World War II the efficiency and productivity of the US economy improved markedly. From 1945 to 1975 output per hour of labor increased 120 percent while output per standard unit of energy increased 23 percent. Work hours in agriculture fell from 19.2 to 7.5 percent also during this time. As the 1960 presidential election campaign got under way, the 1960-1961 recession began. John F Kennedy’s 1960 campaign promise “ to get America moving again “ referred to the American economy. He wanted economic growth at an annual rate of 4-6 percent and unemployment at 4 percent. Kennedy knew that the economy was in big trouble so he sent congress an economic growth and recovery package consisting of twelve measures. They were an increase in the minimum wage from $1.00 to $1.25 per hour and an extension of the minimum wage to a larger pool of workers, an increase in unemployment compensation plus increased aid to children of unemployed workers, increase social security benefits to a larger pool of people, emergency relief for feed grain farmers, area redevelopment, vocational training for displaced workers, and federal funding for home building and slum eradication. By mid 1962 he was convinced the economy needed additional stimulation that could be provided through a tax cut. Kennedy suggesting that business needed the tax relief that would be provided by liberalizing the depreciation allowance on new plants and equipment and by giving business a 7 percent investment tax credit.
In early 1963 inflation was stable, corporate profits were at a record high, and the stock market had rebounded, but unemployment was still too high at 5.7 percent.
President Johnson inherited a strong economy from president Kennedy. The growth during his presidency between 1964 and 1965 gave him an annual dividend of $4-5 billion in extra revenues to spend. For the first two years of Johnson’s presidency the inflation rate was just under 2 percent. In 1965 inflation began to pick up slightly, but the GNP (gross national product) grew by $9 billion and unemployment stood at 1.4 percent. The economy was looking better during the winter of 1966: real growth was 9 percent, and with unemployment at 3.8 percent the economy was robust. As it reached 1967 Johnson administration became concerned with inflation. On August 3 Johnson asked congress to impose a temporary 10 percent income tax surcharge. The surcharge became a law on June 28 1968 that was tied to a $6 billion budget reduction. In 1968, Johnson’s almost last month in office, the growth rate was 4 percent and the unemployment rate was only 3.3 percent, but the inflation rate had reached 4.7 percent.
In January 1969, President Richard M. Nixon moved slowly on the economy. Nixon avoided to some advisers that were calling for wage and price controls and relied instead on some minor trimming of federal spending during his first year. By mid 1970 the inflation rate had reached 6.5 percent.
The federal governments position in the economy continued growing during the decade. The government played several economic roles: it was at once a consumer, an employer, a regulator, and a social welfare agency. As a consumer it pumped billions of dollars into the economy by supporting scientific research, buying military equipment, building highways, and competing with the Soviet Union. As an employer it provided large numbers of civilian and military jobs. As a regulator the government stepper up its operations to control the economy and shape the business environment.
By the end of the decade the average Americans real income had increased 50 percent. Median family income rose from $8,540 in 1963 to $10,770 by 1969.
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