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Economic Situation

Two million men have been cut back from our Armed Forces and defense plants because of our success in winding down the war in Vietnam. A few days ago I was presented with a report I'd asked for, a comprehensive audit, if you will, of our economic condition.

And it is that very system that makes it possible for us to help the poor, makes it possible for us to feed the hungry, to clean up our environment, to meet all the other great goals which we have set for ourselves as a nation. The sharp degeneration has its many reflexes in distress and hardship upon our people. I ask the Congress to consider as its first priority--before all other business--the enactment of three tax proposals that are essential to the new prosperity. Prior to World War II, taxes were such that on the average we only had to work just a little over i month each year to pay our total Federal, State, and local tax bill.

Now, this isn't because they're better workers.

I understand those temptations.

If we were not a great power, we would not be the America we know. In the past 40 years, we have had only 2 years with real prosperity, without war and without inflation. That means that price and wage stabilization, in whatever form it takes, must be only a way station on the road to free markets and free collective bargaining in a new prosperity without war. In the short run, they will be very popular proposals.

edu/ws/index. We were once the greatest producer of automobiles, producing more than all the rest of the world combined. And, my colleagues in the Congress, we cannot accomplish these goals if we make the mistake of disparaging and undermining "the system" that produces America's wealth---of casting it in the false light of an oppressor and exploiter of human beings. Such loans should be made by purchase of State bonds by the Corporation but where States are unable to issue bonds then loans should be made upon application of State authorities, and if they are not regularized by the issuance of bonds within a period of 12 to 18 months, they should become a charge upon the Federal aid funds to which such States may be entitled.

We're victims of language.

In the years ahead, we will remain a good and a generous nation--but the time has come to give a new attention to America's own interests here at home. First, it will be an incentive to business to him more workers. Excessive taxation of individuals has robbed us of incentive and made overtime unprofitable.

Let us make sure that there will be no further delays. Government just uses business in a kind of sneaky way to help collect the taxes.

Because the Congress has not yet enacted two of my principal legislative proposals-welfare reform and revenue sharing--I have recommended that their effective dates be postponed, 3 months for revenue sharing, x year for welfare reform. It's time to try something different, and that's what we're going to do.

Wars are usually accompanied by inflation. When capital investment is made, it's too often for some unproductive alterations demanded by government to meet various of its regulations. The immediate result has been to create an entirely unjustified run upon the American dollar from foreign countries and within the past few days despite our national wealth and resources and our unparalleled gold reserves our dollar stands at a serious discount in the markets of the world for the first time in half a century.

We can leave our children with an unrepayable massive debt and a shattered economy, or we can leave them liberty in a land where every individual has the opportunity to be whatever God intended us to be. Now, in the coming year this Congress will face many temptations to raise spending and to cut taxes in addition to the recommendations I have made. It needs solidarity before the world in demonstrating that America has the courage to look its difficulties in the face and the capacity and resolution to meet them.

Because when a nation ceases to compete, when it ceases to try to do its best, then that nation ceases to be a great nation. At the same time, however, we cannot delay in implementing an economic program aimed at both reducing tax rates to stimulate productivity and reducing the growth in government spending to reduce unemployment and inflation. The first is a legacy of war.

We can begin to reward hard work and risk-taking, by forcing this Government to live within its means. All it takes is a little common sense and recognition of our own ability.

Some government programs seemed so worthwhile that borrowing to fund them didn't bother us. And third, I urge the Congress to create more consumer purchasing power by permitting the planned $50 increase in the personal income tax exemption scheduled for 1973 to take effect next January 1, one full year ahead of schedule. I recognize the complaint that estimates of the taxes required and reductions of expenses needed have been repeatedly increased, but on the other hand it should be borne in mind that if tax and economy legislation recommended from time to time since last December had been promptly enacted there would have been less degeneration and stagnation in the country. As we correct what is wrong in this nation, let us always speak up for what is right about America.

We have paid out nearly $150 billion in foreign aid, economic and military, over the past 25 years. The reaction of the American people to the new economic policy has been unselfish and courageous. We know now that inflation results from all that deficit spending. And make no mistake about it, we can turn them around.