ipl-logo

Government Spending In The 1970s

421 Words2 Pages

Government spending in 1970 consisted of approximately 95 billion dollars in defense, 21 billion in welfare, 57 billion in education, 22 billion in healthcare, and 32 billion in pensions (US Government Spending 1970). Government spending for defense increased during the Vietnam War. However, when it concluded in the mid 1970’s, spending declined. This was a time of inflation and high unemployment. Created in 1970 was the Extended Benefits Program (Moody 's Analytics Buffet Blog). It provided assistance when there is high unemployment, which was seen in the 1970’s. In 1971, The Revenue Act of 1971 was put into effect. This Act increased the minimum standard deduction from 1,000 to 1,300. In the 1970’s and even the last 80 years, the government …show more content…

At the end of 1973, the unemployment rate was 4.8 percent. It spiked to 8.9 percent in middle of 1975. To help with the high unemployed and inflated economy, President Ford proposed a tax cut of approximately 16 billion dollars and wanted Congress to halt government spending. Congress did pass a tax cut of over 20 billion dollars, but increased spending on …show more content…

Government expenditure increased due to personal tax credits and more leniency towards applicants for unemployment compensation. Tax changes in the mid 1970’s benefitted the middle to lower income bracket by increasing their disposable income (A Tale of Two Tax Cuts, 2001). In the late 60’s and early 70’s, the US was in an inflationary gap. The Oil Crisis caused a shift to the left in the short-run aggregate supply. It then resulted in a recession. President Ford’s billion’s of dollars worth of tax cuts along with the extended benefits program increased the federal deficit of the US. The aggregate demand also increased. There were other tax acts during the 1970’s; however, they were trivial, and their economic impact was minor such as the Tax Reform Act of 1976 and the Tax Reduction and Simplification Act of 1977. The US Real GDP per capita kept decreasing every quarter of 1974. However, after the tax cuts, in 1975, Real GDP averaged over 4 percent (A Tale of Two Tax Cuts, 2001). Fiscal policies are seemingly non-existent in the 1970’s though as compared to other eras, such as the 2000’s. There wasn’t as much data on fiscal policy in the

Show More
Related
623 Words | 3 Pages

Impact of the Great Depression The Forgotten Man: A New History of the Great Depression, written by Amity Shlaes, gives a lengthy detail of the Great Depression. According to her viewpoint the government handled the situation of the economic crisis very poorly, which led to the Great Depression lasting longer than it suppose to. In this book, Shlaes wrote about observed action taken by Calvin Coolidge, Herbert Hoover and Franklin D. Roosevelt. She gave a detail of the years from 1927 to 1940 and in the beginning of every chapter she mentioned the unemployment rate and the average of Dew Jones Industry.

Read More
711 Words | 3 Pages

The time period of 1968 and 1974, putting the United States in a state of disarray. The focus was Nixon and his administration and how they would pull the U.S. out of such calamity. The war in Vietnam was a costly and unpopular war, causing massive inflation along with riots in the U.S. Another challenge faced was the energy crisis, in which the price for gas skyrocketed. This was do to America 's dependency on foreign oil from Arab nations.

Read More
1274 Words | 6 Pages

This new common sense greatly reflected Keynesian views of the economy. Not only did this new common sense become popular in the United States, but it also became popular throughout the world. Many countries began to adopt this new common sense, especially after World War II. Globally, there was a common agreement on the belief that government intervention in the market was not a bad thing, but an essential key factor in maintaining a healthy economy. Following Keynes’s ideologies, the United States government increased the budget deficit to help other countries whose economies were destroyed by the war recover their economies.

Read More
971 Words | 4 Pages

From Statistics provided by the Department of Commerce from the years of 1949 to 1959, a steady increase is seen in the GNP, which shows the nation’s overall wealth (Document G). These numbers suggest the economy booming soon after the war, meaning that even during the recession of 1953 people had money enough and steady jobs to support their lifestyles. This was done during Eisenhower’s Administration, and the statistics show that the tactics he chose to increase the GNP worked, as it went up almost $500 in 10 years. Though the GNP went up, the government also spent much more money than previously, even on things such as the Interstate and Highway System. This system was put in place as a defense mechanism in June 1956, and was widely recognized across the nation as a grand idea to pull the nation back together.

Read More
1483 Words | 6 Pages

The people who were lucky enough to keep the job they had were paid much less than they were before. More and more people were becoming homeless, and some were struggling to support their family. President Franklin D. Roosevelt put reform and relief measures into place,

Read More
564 Words | 3 Pages

The wealth during the 1920s left Americans unprepared for the economic depression they would face in the 1930s. The Great Depression occurred because of overproduction by farmers and factories, consumption of goods decreased, uneven distribution of wealth, and overexpansion of credit. Hoover was president when the depression first began, and he maintained the government’s laissez-faire attitude in the economy. However, after the election of FDR in 1932, his many alphabet soup programs in his first one hundred days in office addressed the nation’s need for change.

Read More
1684 Words | 7 Pages

This economic program was planned to promote economic growth, but instead it brought upon more economic burden upon the lower urban social class (Foner 2017). Reagan’s plan to tax the wealthy less to improve the lives of the poor did not pan out well to

Read More
949 Words | 4 Pages

In the 1930’s a group of government programs and policies were established under President Franklin D. Roosevelt, they were created with the intention to help the American people during The Great Depression. The Great Depression was a time were many banks failed, many businesses and factories went bankrupt, and millions of Americans are out of work, homeless, and hungry. Most New Deal programs gave American citizens economic relief, chances for employment and helped for the general good. The New Deal’s intention was to help Americans during these troubling times filled with economic uncertainty, and in that aspect, it was a success. After the New Deal was implemented, unemployment rates were gradually lowered.

Read More
642 Words | 3 Pages

Reaganomics was also called “trickle-down economics” Meaning, the wealth of the upper-class would “trickle down” to the middle and lower classes. The Reagan

Read More
854 Words | 4 Pages

Unemployment rates began to increase. Over time, Reagan had increased taxes 11 times, mainly on the middle class. When Reagan had left office, he had tripled the national debt of United States. This had affected the United States and led to several issues later on. This is the reason Reaganomics had both aided some and destroyed others.

Read More
493 Words | 2 Pages

He did this to reduce the money spent so that we would be able to benefit from it. Reagan did make a lot of changes that really helped the people better their money problems.

Read More
560 Words | 3 Pages

The United States economy was in disarray, suffering after the 1979 energy crisis. Due to high unemployment and inflation, many Americans had lost faith in the government and the nation as a whole. When Reagan took office in 1981, the recession and this “national malaise” were already about a year old. However, many people faulted him for America’s poor condition. Immediately, he addressed the declining economy, introducing many new policies that came to be known as “Reaganomics.”

Read More
717 Words | 3 Pages

As companies were easing back from the war-time economy, people were buying more things. As the elected presidents of that time gave tax cuts and vetoed bills in their favor, companies were growing. With the growth of companies, their workers were getting higher wages and more people were employed, giving them excess money. More money meant that people were able to buy things previously unable to. Some of these new things were like the Model T Ford, the Band-Aid and the television.

Read More
711 Words | 3 Pages

Besides fiscal policies there were also monetary policies that were implemented during this time that helped provide much need liquidity and better financing options within the market. Without these much-needed policies the Great Recession would have lasted much longer than in did. Even today we are still feeling the ramifications of the Great

Read More
791 Words | 4 Pages

The tax cut and increased defense spending increased the federal deficit. Increased spending for welfare programs and unemployment compensation, both of which were induced by the plunge in real GDP in the early 1980s, contributed to the deficit as well. As deficits continued to rise, they began to dominate discussions of fiscal policy. The events of the 1980s do not suggest that either monetarist or new classical ideas should be abandoned, but those events certainly raised doubts about relying solely on these approaches. Reducing the deficit dominated much of fiscal policy discussion during the 1980s and 1990s.

Read More

More about Government Spending In The 1970s

Related Topics

Open Document