policy - The Black Vault

THE BDM CORPORATION
"relative meits of taxation,
rationing, and wage and price controls as
mechanisms affecting demand, the timing of the implementation of these
measures and the economic effect of this timing, etc. Thus the failure of
efforts to eliminate war-related inflation during and after World War II
and the Korean War in no way leads to the necessary conclusion that all
such efforts are useless. Quite to the contrary, it is almost universally
accepted that the absence of such measures (and, in particular, the failure
to increase taxes) during the Vietnam years seriously compounded the
economic problems that were developing in this country during the 1960s.
C. THE KENNEDY YFARS
that:
In his first state-of-the-union address,
President Kennedy declared
We take office in the wake of seven months of recession,
three and one half years of slack, seven years of
diminished economic growth. . . . Our recovery from the
1958 recession, moreover, was anemnic and incomplete.
Our Gross National Product never regainea its full
potential. Unemployment never returned to normal
levels. Maximum use of our industrial capacity was
never resttored. . . The most resourceful industrialized
country on earth ranks among the last in economic
growth . . . This Administration does not intend to
stand helplessly by . . . 12/
Adding to the domestic reasons for an activist economic policy by the new
administration was that slow US
economic growth was being labeled by the
communists as evidence of the US economic system's inherent weakness, with
Khrushchev boasting that by 1970 the Soviet Union would out-produce the
US. 13/ In 1961, howaver, the appropriate way to get the US economy
"moving again" was not at all clear.
1. The Development of Tax-Cut Legislation, 1962-64
When Kennedy first took office he gave evidence of being an
economic conservative, a fact which, in part at least, reflected Republican
campaign charges that Kennedy was an anti-business "spend thrift." Thus,
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