The Economics of the Political Parties, with Special Attention to Presidents Eisenhower and Kennedy

The Economics of the Political Parties, with Special Attention to Presidents Eisenhower and Kennedy

The Economics of the Political Parties, with Special Attention to Presidents Eisenhower and Kennedy

The Economics of the Political Parties, with Special Attention to Presidents Eisenhower and Kennedy

Excerpt

Government has a large and increasing role to play in the life of the nation. This is fundamental to our well-being and even our survival. How otherwise could we have contended with the Great Depression in the thirties; the communist threat in the postwar era; the disruptions caused by automation; the gradual increase in our aging population; the need to divert resources to the public sector for research, health, education, resource development (and incidentally for growth); for compulsory insurance for old age and health, for treatment of unemployment?

My disagreements with the Eisenhower administration and its aftermath stem primarily from a difference in value judgments but also from disagreement on economic analyses. The Republicans write down the use of fiscal policy--for ideological reasons. Fiscal policy means more government intervention: the use of taxation, public expenditures and debt policy to stabilize and stimulate the economy. Proper use of fiscal policy contributes to stabilization and growth. When George Humphrey, the Secretary of the Treasury, threatened to resign if deficit spending were used to treat a recession, he raised not only an ideological, but also an economic issue. Most economists would argue that fiscal treatment of a recession adds to, rather than detracts from, output and hence to economic well-being.

The importance of the ideological difference is suggested by the following: In 1952 Federal Government purchases of goods and services were $52.9 billion; in 1960, $52.3 billion. Yet the nation's gross national product had risen by $156 billion in this period. Federal drains on the nation's output had declined from 15 to 10 per . . .

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