ECONOMIC

ECONOMIC REPORT OF THE PRESIDENTTo the Congress of the United States:The United States enters 1974 in a position of leadership in the worldeconomy. The dollar is strong, we have constructive economic relationsthroughout the world, and we have the greatest freedom of action resultingfrom our great capacity to produce. We must take the responsibilitiesand the opportunities this position of leadership gives us.Nineteen hundred and seventy-three was a year of problems andprogress in the American economy. In some respects the problems weregreater than we expected and the progress was less than we had hoped.But the areas of our solid achievements were more important than theareas of our disappointments. We and the world around us have difficulttasks ahead—primarily to deal with an old problem, inflation, and todeal with one that has just become acute, energy. But the United Statesconfronts these difficulties with a strong and adaptable economy, whichmeans an economy of capable and enterprising people.In the middle of 1971, when the New Economic Policy was launched,the country had three economic objectives: to promote the expansionof output and reduce unemployment, to correct the persistent deficitin the U.S. balance of payments, and to check the inflation which hadbeen going on for 5J/2 years. To achieve these objectives a comprehensiveprogram of action was initiated. Taxes were reduced. Price andwage controls were instituted. The exchange rate of the dollar was setfree to adjust to market conditions, and steps were initiated to improvethe international monetary system.There has been great progress toward two of these three objectives.Production and employment have risen rapidly. Total civilian employmentwas 6.8 million higher in December 1973 than in June 1971. Theunemployment rate had fallen from 6 percent to a little under 5 percent.In 1973 a larger percentage of the civilian population over the ageof 16 was employed than ever before.With vigorously rising employment, and rising productivity as well,there was a big increase in output of goods and services, the essentialingredients of higher living standards. In the 2^/2 years of the New