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How The Seven Biggest Presidential Speeches On The Economy Failed

Douglas A. McIntyre

5. Ford’s Economic Discussion
> Date: October 8th, 1974
> President: Gerald Ford
> Inflation: 11.0%
> GDP 1 yr. growth: -0.6%
> Unemployment: 5.6%

In 1974, after a brief period of prosperity, the economy took a serious turn for the worse. For the first time since 1958 the country’s GDP contracted. More worrisome than this was that inflation had jumped to 11% from the previous year. In his 1974 speech to Congress, Ford stated his desire simply and clearly: “We must whip inflation right now.” He wanted to deregulate the economy to increase proficiency and to enact a temporary tax surcharge of 5%. His requests were not granted. The next year, unemployment jumped to 8.5%, the highest since The Great Depression. Worse still, inflation continued to rise an additional 9%. Economic conditions continued to deteriorate until a year later when Congress enacted a tax cut proposal and a tax rebate. It is this rebate, not Ford’s effort, that is credited with ending the recession.

6. Carter’s Energy Discussion
> Date: April 20th, 1977
> President: Jimmy Carter
> Inflation: 6.5%
> GDP 1 yr. growth: +4.6%
> Unemployment: 7.1%

In 1977, the U.S. was between energy crises. The first was the result of the Arab oil embargo in 1973, and the second came in 1979 during the Iranian revolution. Oil prices, which were less than $3 a barrel before 1970, reached $10 a barrel by the mid-1070s. They would more than double by the beginning of the 1980s. With soaring fuel costs on the nation’s mind, Carter had addressed the nation with a 10-point proposal to reduce the U.S.’s energy usage in the long term. Carter’s suggestions ranged from developing alternative energy sources, including wind power, to avoiding subsidies that artificially reduce energy costs. Most of these proposals failed to get off the ground, and the vast majority of them have not been enacted to this day.

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7. Reagan’s Speech on Economic Recovery and Inflation
> Date: April 28th, 1981
> President: Ronald Reagan
> Inflation: 10.3%
> GDP 1 yr. growth: +2.5%
> Unemployment: 7.6%

The nation faced particularly high inflation in the early 1980s. To address this problem, as well as the moribund state of the economy, President Reagan delivered a speech to Congress. In that speech he pushed for cutting government spending and tax rates, saying, “Our government is too big, and it spends too much.” As a result, the Economic Recovery Tax Act of 1981 was passed, albeit to little effect. The economy soon fell further into recession. Inflation remained high and unemployment increased, peaking at an annual rate of 9.7% in 1982. It is possible that the recovery, which started two years later, was the result of Federal Reserve policy and defense spending.