Economic Report of the President

ECONOMIC REPORT OF THE PRESIDENTTo the Congress of the United States:Two years ago, I came to Washington with a deep personal commitmentto change America's economic future. For more than adecade, the economy had suffered from low productivity growth anda rising rate of inflation. Government spending absorbed an increasingshare of national income. A shortsighted view of economic prioritieswas destroying our prospects for long-term prosperity.The economic program that I proposed shortly after I took officeemphasized economic growth and a return to price stability. My taxproposals were designed to encourage private initiative and to stimulatesaving and productive investment. I have supported and encouragedthe Federal Reserve Board in its pursuit of price stabilitythrough sound monetary policy. My Administration has slowed thegrowth of Federal regulation, strengthening the forces of competitionin a number of economic sectors. And I have worked with the Congressto enact legislation that has reversed or limited the growth ofgovernment programs that have become too large or outlasted theirusefulness.Although the full effect of these changes in government policy willtake time to develop, some of the benefits have already become apparent.The rate of consumer price inflation between December 1981and December 1982 was only 3.9 percent, about one-third of the ratein the year before I took office. Interest rates are now lower thanwhen I took office, and have fallen rapidly during the last 6 months.The Administration will propose many additional measures overthe next several years to strengthen economic incentives, reduce burdensomeregulations, increase capital formation, and raise our standardof living. It is easy to lose sight of these long-term goals in ayear, like 1982, when the economy was in an extended recession. Iam deeply troubled by the current level of unemployment in theUnited States and by the suffering and anxiety that it entails for millionsof Americans. The unemployment that many of our citizens areexperiencing is a consequence of the disinflation that must necessarilyfollow the accelerating inflation of the last decade. Allowing theupward trend of inflation to continue would have risked even greaterincreases in unemployment in the future. In spite of the present highunemployment rate and the accompanying hardships, it is essentialthat we maintain the gains against inflation that we have recently