Good afternoon: Tomorrow I will send to the Congress the economic section of my State of the Union report. One fact stands out above all others in this report: For the first time in nearly 20 years, we can look forward to genuine prosperity in a time of peace. For most people, talking about the economy brings to mind some vast, complicated machine. Today, I want to talk about the economy in personal terms-about its impact on you and your family. Basically the economy affects you-in three ways. First, it affects your jobs, how plentiful they are, how secure they are, how good they are. Second, it affects what you take home from those jobs and how much you can buy with your income. And finally, it affects how much you can spend on your own and how much you have to pay back to the Government in taxes. Let's look briefly at each of these elements. To begin with, the job picture today is very encouraging. The number of people at work in this country rose by 2.3 million during 1972, the largest increase in 25 years. Unemployment fell from the 6 percent level in 1971 to 5 percent last month. This record is even more remarkable since so many more people have been seeking jobs than usual. Nearly 3 million Americans have been released from defense related jobs since 1969, including over i million veterans. Women and teenagers have also been looking for work in record numbers. Yet jobs for all these groups have increased even faster. The reason for this success is that the economy grew by 6 1/2 percent last year, one of the best performances in the past quarter century. Our economic advisers expect a growth rate of nearly 7 percent in 1973. That would bring unemployment down to around the 4¼ percent level. The second great question is how much you take home from your job, how much it will buy for you. Here the news is also good. Not only are more people working, but they are getting more for their work. Average per capita income rose by 7.7 percent during 1972. That is well above the average gain during the previous 10 years. Most important, however, is that these gains were not wiped out by rising prices, as they often were in the 1960's. The Federal Government spent too much too fast in that period, and the result was runaway inflation. Your wages may have climbed very rapidly during those years, but not your purchasing power. Now that has changed. The inflation rate last year was cut nearly in half from what it was 4 years ago. The purchasing power of the average worker's take-home pay rose more last year than in any year since 1955. It went up by 4.3 percent, the equivalent of two extra weekly paychecks. We expect to reduce inflation even further in 1973, for several reasons. The fundamental reason is the Nation's growing opposition to big spending. We have a good chance now, the best in years, to curb the growth of the Federal budget. That will do more than anything else to protect your family budget. Other forces are working for us, too. Productivity increased sharply last year, which means the average worker is producing more and, therefore, can earn more without driving prices higher. In addition, the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year. Workers will not have to catch up from an earlier slump in earnings. Finally, we now have a new system of wage and price controls, one that is the right kind of system for 1973. The idea that controls have virtually been ended is totally wrong. We still have firm controls. We are still enforcing them firmly. All that is changed is our method of enforcing them. The old wage and price control system depended on a Washington bureaucracy to approve major wage and price increases in advance. Although it was effective while it lasted, this system was beginning to produce inequities and to get tangled in red tape. The new system will avoid these dangers. Like most of our laws, it relies largely on self-administration, on the voluntary cooperation of the American people. But if some people should fail to cooperate, we have the will and we have the means to crack down on them. We would like Phase III to be as voluntary as possible, but we will make it as mandatory as necessary. Our new system of controls has broad support from business and labor, the keystone for any successful program. It will prepare us for the day when we no longer need controls. It will allow us to concentrate on those areas where inflation has been most troublesome--construction, health care, and especially food prices. Let me focus for a moment on food prices. They have risen sharply at the wholesale level in recent months, so that figures for retail prices in January and February, when they are published, will inevitably show sharp increases. In fact, we will probably see increases in food prices for some months to come. The underlying cause of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand. But we must not accept rising food prices as a permanent feature of American life. We must halt this inflationary spiral by attacking the causes of rising food prices on all fronts. Our first priority must be to increase supplies of food to meet the increased demand. Your Government is already moving vigorously to expand our food supplies. We are encouraging farmers to put more acreage into production of both crops and livestock. We are allowing more meat and dried milk to come in from abroad. We have ended subsidies for agricultural exports, and we are reducing the Government's agricultural stockpiles. We are encouraging farmers to sell the stock they own. Now, measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices. Unfortunately, they cannot do much about prices in the next few months, but they will have a powerful effect in the second half of the year. They will bring relief to the American housewife without damaging the prosperity of our farmers. Farm income today is higher than ever, and it will go even higher as we increase farm production. For all these reasons, we have a good chance to reduce the overall inflation rate to 2 1/2 percent or less by the end of 1973. That means your dollars will go further at your local shop or supermarket. The third important economic question concerns how much money you control for yourself and how much you pay out in taxes. Here the picture is also promising. Since 1950, the share of the average family's income taken for taxes in the United States has nearly doubled, to more than 20 percent. The average person worked less than 1 hour out of each 8-hour day to pay his taxes in 1950. Today he works nearly 2 hours each day for the tax collector. No wonder someone once described the taxpayer as a person who doesn't have to take a civil service examination to work for the Federal Government. In fact, if tax cuts had not been adopted during our first term, the average worker's pay increase last year would have been wiped out entirely by increased taxes. The only way to stop tax increases is to stop spending more than our present tax rates produce in revenue. That is why we are cutting back on Federal programs that waste the taxpayers' money--for example, on housing programs that benefit the well-to-do but shortchange the poor, health programs that build more hospitals when hospital beds are now in surplus, educational bonuses that attract more people into teaching when tens of thousands of teachers already cannot find jobs. These old programs may have appealing names, they may sound like good causes, but behind the fancy label often lies a dismal failure. Unless we cut back now on the programs that have failed, we will soon run out of money for the programs that can succeed. It has been charged that our budget cuts show a lack of compassion for the disadvantaged. The best answer to this charge is to look at the facts. We are budgeting 66 percent more to help the poor next year than was the case 4 years ago, 67 percent more to help the sick, 71 percent more to help older Americans, and 242 percent more to help the hungry and malnourished. Altogether, our human resources budget is nearly double that of 4 years ago when I came into office. We have already shifted our spending priorities from defense programs to human resources programs. Now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off. That is how to show we truly care about the needy. The question is not whether we help, but how we help. By eliminating programs that are wasteful, we can concentrate on programs that work. Our recent round of budget cuts can save $11 billion in this fiscal year, $ 19 billion next fiscal year, $24 billion the year after. That means an average saving of $700 over the next 3 years for each of America's 75 million taxpayers. Let me turn, finally, to one other major economic decision we made last week--- our proposal to change the relative value of the dollar in trading abroad. We took this step because of a serious trade imbalance which could threaten your prosperity. America has recently been buying more from other countries than they have been buying from us. Now, just as a company cannot go on indefinitely buying more than it sells, neither can a country. Changing the exchange rate will help us change this picture. It means our exports will be priced more competitively in the international marketplace, and they should, therefore, sell better. Our imports, on the other hand, will not grow as fast. But this step must now be followed by reforms which are more basic. First, we need a more flexible international monetary system, one that will lead to balance without crisis. The United States set forth fundamental proposals for such a system last September. It is time for other nations to join us in getting action on these proposals. Second, American products must get a fairer shake in world trade so that we can extend American markets and expand American jobs. If other countries make it harder for our products to be sold abroad, then our trade imbalance can only grow worse. That is why I will soon propose to the Congress new trade laws which would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair. Our overall goal is to reduce trade and investment barriers around the world, but they cannot decline for one country and remain high for others. My proposals will allow us to work more effectively for a new trading system which is equitable for all. Even as we reduce the foreign barriers that keep us from competing abroad, we must also strengthen our ability to compete. This means working more efficiently as well as working hard, so that we can increase our productivity. It means taking greater pride in our work. It means fighting harder to slow inflation. And it means keeping Federal spending down. If we do these things, 1973 can usher in a new era of prolonged and growing prosperity for the United States. Unlike past booms, this new prosperity will not depend on the artificial stimulus of war. It will not be eaten away by the blight of inflation. It will be solid. It will be steady. It will be sustainable. If we act responsibly, this new prosperity can be ours for many years to come; if we don't, then as Franklin Roosevelt once warned, we could be "wrecked on (the) rocks of loose fiscal policy." The choice is ours. Let us choose responsible prosperity. Thank you and good afternoon.
Good afternoon: Tomorrow I will send to the Congress the economic section of my State of the Union report. One fact stands out above all others in this report: For the first time in nearly 20 years, we can look forward to genuine prosperity in a time of peace. For most people, talking about the economy brings to mind some vast, complicated machine. Today, I want to talk about the economy in personal terms-about its impact on you and your family. Basically the economy affects you-in three ways. First, it affects your jobs, how plentiful they are, how secure they are, how good they are. Second, it affects what you take home from those jobs and how much you can buy with your income. And finally, it affects how much you can spend on your own and how much you have to pay back to the Government in taxes. Let us look briefly at each of these elements. To begin with, the job picture today is very encouraging. The number of people at work in this country rose by 2.3 million during 1972, the largest increase in 25 years. Unemployment fell from the 6 percent level in 1971 to 5 percent last month. This record is even more remarkable since so many more people have been seeking jobs than usual. Nearly 3 million Americans have been released from defense related jobs since 1969, including over i million veterans. Women and teenagers have also been looking for work in record numbers. Yet jobs for all these groups have increased even faster. The reason for this success is that the economy grew by 6 1/2 percent last year, one of the best performances in the past quarter century. Our economic advisers expect a growth rate of nearly 7 percent in 1973. That would bring unemployment down to around the 4¼ percent level. The second great question is how much you take home from your job, how much it will buy for you. Here the news is also good. Not only are more people working, but they are getting more for their work. Average per capita income rose by 7.7 percent during 1972. That is well above the average gain during the previous 10 years. Most important, however, is that these gains were not wiped out by rising prices, as they often were in the 1960's. The Federal Government spent too much too fast in that period, and the result was runaway inflation. Your wages may have climbed very rapidly during those years, but not your purchasing power. Now that has changed. The inflation rate last year was cut nearly in half from what it was 4 years ago. The purchasing power of the average worker's take-home pay rose more last year than in any year since 1955. It went up by 4.3 percent, the equivalent of two extra weekly paychecks. We expect to reduce inflation even further in 1973, for several reasons. The fundamental reason is the Nation's growing opposition to big spending. We have a good chance now, the best in years, to curb the growth of the Federal budget. That will do more than anything else to protect your family budget. Other forces are working for us, too. Productivity increased sharply last year, which means the average worker is producing more and, therefore, can earn more without driving prices higher. In addition, the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year. Workers will not have to catch up from an earlier slump in earnings. Finally, we now have a new system of wage and price controls, one that is the right kind of system for 1973. The idea that controls have virtually been ended is totally wrong. We still have firm controls. We are still enforcing them firmly. All that is changed is our method of enforcing them. The old wage and price control system depended on a Washington bureaucracy to approve major wage and price increases in advance. Although it was effective while it lasted, this system was beginning to produce inequities and to get tangled in red tape. The new system will avoid these dangers. Like most of our laws, it relies largely on self-administration, on the voluntary cooperation of the American people. But if some people should fail to cooperate, we have the will and we have the means to crack down on them. We would like Phase III to be as voluntary as possible, but we will make it as mandatory as necessary. Our new system of controls has broad support from business and labor, the keystone for any successful program. It will prepare us for the day when we no longer need controls. It will allow us to concentrate on those areas where inflation has been most troublesome--construction, health care, and especially food prices. Let me focus for a moment on food prices. They have risen sharply at the wholesale level in recent months, so that figures for retail prices in January and February, when they are published, will inevitably show sharp increases. In fact, we will probably see increases in food prices for some months to come. The underlying because of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand. But we must not accept rising food prices as a permanent feature of American life. We must halt this inflationary spiral by attacking the causes of rising food prices on all fronts. Our first priority must be to increase supplies of food to meet the increased demand. Your Government is already moving vigorously to expand our food supplies. We are encouraging farmers to put more acreage into production of both crops and livestock. We are allowing more meat and dried milk to come in from abroad. We have ended subsidies for agricultural exports, and we are reducing the Government's agricultural stockpiles. We are encouraging farmers to sell the stock they own. Now, measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices. Unfortunately, they cannot do much about prices in the next few months, but they will have a powerful effect in the second half of the year. They will bring relief to the American housewife without damaging the prosperity of our farmers. Farm income today is higher than ever, and it will go even higher as we increase farm production. For all these reasons, we have a good chance to reduce the overall inflation rate to 2 1/2 percent or less by the end of 1973. That means your dollars will go further at your local shop or supermarket. The third important economic question concerns how much money you control for yourself and how much you pay out in taxes. Here the picture is also promising. Since 1950, the share of the average family's income taken for taxes in the United States has nearly doubled, to more than 20 percent. The average person worked less than 1 hour out of each 8-hour day to pay his taxes in 1950. Today he works nearly 2 hours each day for the tax collector. No wonder someone once described the taxpayer as a person who does not have to take a civil service examination to work for the Federal Government. In fact, if tax cuts had not been adopted during our first term, the average worker's pay increase last year would have been wiped out entirely by increased taxes. The only way to stop tax increases is to stop spending more than our present tax rates produce in revenue. That is why we are cutting back on Federal programs that waste the taxpayers' money--for example, on housing programs that benefit the well-to-do but shortchange the poor, health programs that build more hospitals when hospital beds are now in surplus, educational bonuses that attract more people into teaching when tens of thousands of teachers already cannot find jobs. These old programs may have appealing names, they may sound like good causes, but behind the fancy label often lies a dismal failure. Unless we cut back now on the programs that have failed, we will soon run out of money for the programs that can succeed. It has been charged that our budget cuts show a lack of compassion for the disadvantaged. The best answer to this charge is to look at the facts. We are budgeting 66 percent more to help the poor next year than was the case 4 years ago, 67 percent more to help the sick, 71 percent more to help older Americans, and 242 percent more to help the hungry and malnourished. Altogether, our human resources budget is nearly double that of 4 years ago when I came into office. We have already shifted our spending priorities from defense programs to human resources programs. Now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off. That is how to show we truly care about the needy. The question is not whether we help, but how we help. By eliminating programs that are wasteful, we can concentrate on programs that work. Our recent round of budget cuts can save $11 billion in this fiscal year, $ 19 billion next fiscal year, $24 billion the year after. That means an average saving of $700 over the next 3 years for each of America's 75 million taxpayers. Let me turn, finally, to one other major economic decision we made last week--- our proposal to change the relative value of the dollar in trading abroad. We took this step because of a serious trade imbalance which could threaten your prosperity. America has recently been buying more from other countries than they have been buying from us. Now, just as a company cannot go on indefinitely buying more than it sells, neither can a country. Changing the exchange rate will help us change this picture. It means our exports will be priced more competitively in the international marketplace, and they should, therefore, sell better. Our imports, on the other hand, will not grow as fast. But this step must now be followed by reforms which are more basic. First, we need a more flexible international monetary system, one that will lead to balance without crisis. The United States set forth fundamental proposals for such a system last September. It is time for other nations to join us in getting action on these proposals. Second, American products must get a fairer shake in world trade so that we can extend American markets and expand American jobs. If other countries make it harder for our products to be sold abroad, then our trade imbalance can only grow worse. That is why I will soon propose to the Congress new trade laws which would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair. Our overall goal is to reduce trade and investment barriers around the world, but they cannot decline for one country and remain high for others. My proposals will allow us to work more effectively for a new trading system which is equitable for all. Even as we reduce the foreign barriers that keep us from competing abroad, we must also strengthen our ability to compete. This means working more efficiently as well as working hard, so that we can increase our productivity. It means taking greater pride in our work. It means fighting harder to slow inflation. And it means keeping Federal spending down. If we do these things, 1973 can usher in a new era of prolonged and growing prosperity for the United States. Unlike past booms, this new prosperity will not depend on the artificial stimulus of war. It will not be eaten away by the blight of inflation. It will be solid. It will be steady. It will be sustainable. If we act responsibly, this new prosperity can be ours for many years to come; if we do not, then as Franklin Roosevelt once warned, we could be "wrecked on (the) rocks of loose fiscal policy." The choice is ours. Let us choose responsible prosperity. Thank you and good afternoon.
good afternoon tomorrow i will send to the congress the economic section of my state of the union report one fact stands out above all others in this report for the first time in nearly 20 years we can look forward to genuine prosperity in a time of peace for most people talking about the economy brings to mind some vast complicated machine today i want to talk about the economy in personal its impact on you and your family basically the economy affects three ways first it affects your jobs how plentiful they are how secure they are how good they are second it affects what you take home from those jobs and how much you can buy with your income and finally it affects how much you can spend on your own and how much you have to pay back to the government in taxes let us look briefly at each of these elements to begin with the job picture today is very encouraging the number of people at work in this country rose by million during 1972 the largest increase in 25 years unemployment fell from the 6 percent level in 1971 to 5 percent last month this record is even more remarkable since so many more people have been seeking jobs than usual nearly 3 million americans have been released from defense related jobs since 1969 including over i million veterans women and teenagers have also been looking for work in record numbers yet jobs for all these groups have increased even faster the reason for this success is that the economy grew by 6 percent last year one of the best performances in the past quarter century our economic advisers expect a growth rate of nearly 7 percent in 1973 that would bring unemployment down to around the 4¼ percent level the second great question is how much you take home from your job how much it will buy for you here the news is also good not only are more people working but they are getting more for their work average per capita income rose by percent during 1972 that is well above the average gain during the previous 10 years most important however is that these gains were not wiped out by rising prices as they often were in the 1960 the federal government spent too much too fast in that period and the result was runaway inflation your wages may have climbed very rapidly during those years but not your purchasing power now that has changed the inflation rate last year was cut nearly in half from what it was 4 years ago the purchasing power of the average worker pay rose more last year than in any year since 1955 it went up by percent the equivalent of two extra weekly paychecks we expect to reduce inflation even further in 1973 for several reasons the fundamental reason is the nation growing opposition to big spending we have a good chance now the best in years to curb the growth of the federal budget that will do more than anything else to protect your family budget other forces are working for us too productivity increased sharply last year which means the average worker is producing more and therefore can earn more without driving prices higher in addition the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year workers will not have to catch up from an earlier slump in earnings finally we now have a new system of wage and price controls one that is the right kind of system for 1973 the idea that controls have virtually been ended is totally wrong we still have firm controls we are still enforcing them firmly all that is changed is our method of enforcing them the old wage and price control system depended on a washington bureaucracy to approve major wage and price increases in advance although it was effective while it lasted this system was beginning to produce inequities and to get tangled in red tape the new system will avoid these dangers like most of our laws it relies largely on on the voluntary cooperation of the american people but if some people should fail to cooperate we have the will and we have the means to crack down on them we would like phase iii to be as voluntary as possible but we will make it as mandatory as necessary our new system of controls has broad support from business and labor the keystone for any successful program it will prepare us for the day when we no longer need controls it will allow us to concentrate on those areas where inflation has been most troublesome construction health care and especially food prices let me focus for a moment on food prices they have risen sharply at the wholesale level in recent months so that figures for retail prices in january and february when they are published will inevitably show sharp increases in fact we will probably see increases in food prices for some months to come the underlying because of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand but we must not accept rising food prices as a permanent feature of american life we must halt this inflationary spiral by attacking the causes of rising food prices on all fronts our first priority must be to increase supplies of food to meet the increased demand your government is already moving vigorously to expand our food supplies we are encouraging farmers to put more acreage into production of both crops and livestock we are allowing more meat and dried milk to come in from abroad we have ended subsidies for agricultural exports and we are reducing the government agricultural stockpiles we are encouraging farmers to sell the stock they own now measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices unfortunately they can not do much about prices in the next few months but they will have a powerful effect in the second half of the year they will bring relief to the american housewife without damaging the prosperity of our farmers farm income today is higher than ever and it will go even higher as we increase farm production for all these reasons we have a good chance to reduce the overall inflation rate to 2 percent or less by the end of 1973 that means your dollars will go further at your local shop or supermarket the third important economic question concerns how much money you control for yourself and how much you pay out in taxes here the picture is also promising since 1950 the share of the average family income taken for taxes in the united states has nearly doubled to more than 20 percent the average person worked less than 1 hour out of each day to pay his taxes in 1950 today he works nearly 2 hours each day for the tax collector no wonder someone once described the taxpayer as a person who does not have to take a civil service examination to work for the federal government in fact if tax cuts had not been adopted during our first term the average worker pay increase last year would have been wiped out entirely by increased taxes the only way to stop tax increases is to stop spending more than our present tax rates produce in revenue that is why we are cutting back on federal programs that waste the taxpayers money for example on housing programs that benefit the but shortchange the poor health programs that build more hospitals when hospital beds are now in surplus educational bonuses that attract more people into teaching when tens of thousands of teachers already can not find jobs these old programs may have appealing names they may sound like good causes but behind the fancy label often lies a dismal failure unless we cut back now on the programs that have failed we will soon run out of money for the programs that can succeed it has been charged that our budget cuts show a lack of compassion for the disadvantaged the best answer to this charge is to look at the facts we are budgeting 66 percent more to help the poor next year than was the case 4 years ago 67 percent more to help the sick 71 percent more to help older americans and 242 percent more to help the hungry and malnourished altogether our human resources budget is nearly double that of 4 years ago when i came into office we have already shifted our spending priorities from defense programs to human resources programs now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off that is how to show we truly care about the needy the question is not whether we help but how we help by eliminating programs that are wasteful we can concentrate on programs that work our recent round of budget cuts can save 11 billion in this fiscal year 19 billion next fiscal year 24 billion the year after that means an average saving of 700 over the next 3 years for each of america 75 million taxpayers let me turn finally to one other major economic decision we made last week our proposal to change the relative value of the dollar in trading abroad we took this step because of a serious trade imbalance which could threaten your prosperity america has recently been buying more from other countries than they have been buying from us now just as a company can not go on indefinitely buying more than it sells neither can a country changing the exchange rate will help us change this picture it means our exports will be priced more competitively in the international marketplace and they should therefore sell better our imports on the other hand will not grow as fast but this step must now be followed by reforms which are more basic first we need a more flexible international monetary system one that will lead to balance without crisis the united states set forth fundamental proposals for such a system last september it is time for other nations to join us in getting action on these proposals second american products must get a fairer shake in world trade so that we can extend american markets and expand american jobs if other countries make it harder for our products to be sold abroad then our trade imbalance can only grow worse that is why i will soon propose to the congress new trade laws which would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair our overall goal is to reduce trade and investment barriers around the world but they can not decline for one country and remain high for others my proposals will allow us to work more effectively for a new trading system which is equitable for all even as we reduce the foreign barriers that keep us from competing abroad we must also strengthen our ability to compete this means working more efficiently as well as working hard so that we can increase our productivity it means taking greater pride in our work it means fighting harder to slow inflation and it means keeping federal spending down if we do these things 1973 can usher in a new era of prolonged and growing prosperity for the united states unlike past booms this new prosperity will not depend on the artificial stimulus of war it will not be eaten away by the blight of inflation it will be solid it will be steady it will be sustainable if we act responsibly this new prosperity can be ours for many years to come if we do not then as franklin roosevelt once warned we could be wrecked on the rocks of loose fiscal policy the choice is ours let us choose responsible prosperity thank you and good afternoon
good afternoon tomorrow send congress economic section state union report one fact stands others report first time nearly 20 years look forward genuine prosperity time peace people talking economy brings mind vast complicated machine today want talk economy personal impact family basically economy affects three ways first affects jobs plentiful secure good second affects take home jobs much buy income finally affects much spend much pay back government taxes let us look briefly elements begin job picture today encouraging number people work country rose million 1972 largest increase 25 years unemployment fell 6 percent level 1971 5 percent last month record even remarkable since many people seeking jobs usual nearly 3 million americans released defense related jobs since 1969 including million veterans women teenagers also looking work record numbers yet jobs groups increased even faster reason success economy grew 6 percent last year one best performances past quarter century economic advisers expect growth rate nearly 7 percent 1973 would bring unemployment around 4¼ percent level second great question much take home job much buy news also good people working getting work average per capita income rose percent 1972 well average gain previous 10 years important however gains wiped rising prices often 1960 federal government spent much fast period result runaway inflation wages may climbed rapidly years purchasing power changed inflation rate last year cut nearly half 4 years ago purchasing power average worker pay rose last year year since 1955 went percent equivalent two extra weekly paychecks expect reduce inflation even 1973 several reasons fundamental reason nation growing opposition big spending good chance best years curb growth federal budget anything else protect family budget forces working us productivity increased sharply last year means average worker producing therefore earn without driving prices higher addition fact real spendable earnings rose substantially last year encourage reasonable wage demands year workers catch earlier slump earnings finally new system wage price controls one right kind system 1973 idea controls virtually ended totally wrong still firm controls still enforcing firmly changed method enforcing old wage price control system depended washington bureaucracy approve major wage price increases advance although effective lasted system beginning produce inequities get tangled red tape new system avoid dangers like laws relies largely voluntary cooperation american people people fail cooperate means crack would like phase iii voluntary possible make mandatory necessary new system controls broad support business labor keystone successful program prepare us day longer need controls allow us concentrate areas inflation troublesome construction health care especially food prices let focus moment food prices risen sharply wholesale level recent months figures retail prices january february published inevitably show sharp increases fact probably see increases food prices months come underlying problem food supplies risen fast enough keep rapidly rising demand must accept rising food prices permanent feature american life must halt inflationary spiral attacking causes rising food prices fronts first priority must increase supplies food meet increased demand government already moving vigorously expand food supplies encouraging farmers put acreage production crops livestock allowing meat dried milk come abroad ended subsidies agricultural exports reducing government agricultural stockpiles encouraging farmers sell stock measures stop rise wholesale food prices slow rise retail food prices unfortunately much prices next months powerful effect second half year bring relief american housewife without damaging prosperity farmers farm income today higher ever go even higher increase farm production reasons good chance reduce overall inflation rate 2 percent less end 1973 means dollars go local shop supermarket third important economic question concerns much money control much pay taxes picture also promising since 1950 share average family income taken taxes united states nearly doubled 20 percent average person worked less 1 hour day pay taxes 1950 today works nearly 2 hours day tax collector wonder someone described taxpayer person take civil service examination work federal government fact tax cuts adopted first term average worker pay increase last year would wiped entirely increased taxes way stop tax increases stop spending present tax rates produce revenue cutting back federal programs waste taxpayers money example housing programs benefit shortchange poor health programs build hospitals hospital beds surplus educational bonuses attract people teaching tens thousands teachers already find jobs old programs may appealing names may sound like good causes behind fancy label often lies dismal failure unless cut back programs failed soon run money programs succeed charged budget cuts show lack compassion disadvantaged best answer charge look facts budgeting 66 percent help poor next year case 4 years ago 67 percent help sick 71 percent help older americans 242 percent help hungry malnourished altogether human resources budget nearly double 4 years ago came office already shifted spending priorities defense programs human resources programs must also switch spending priorities programs give us bad return dollar programs pay show truly care needy question whether help help eliminating programs wasteful concentrate programs work recent round budget cuts save 11 billion fiscal year 19 billion next fiscal year 24 billion year means average saving 700 next 3 years america 75 million taxpayers let turn finally one major economic decision made last week proposal change relative value dollar trading abroad took step serious trade imbalance could threaten prosperity america recently buying countries buying us company go indefinitely buying sells neither country changing exchange rate help us change picture means exports priced competitively international marketplace therefore sell better imports hand grow fast step must followed reforms basic first need flexible international monetary system one lead balance without crisis united states set forth fundamental proposals system last september time nations join us getting action proposals second american products must get fairer shake world trade extend american markets expand american jobs countries make harder products sold abroad trade imbalance grow worse soon propose congress new trade laws would make easier us lower trade barriers countries lower also raise barriers necessary keep things fair overall goal reduce trade investment barriers around world decline one country remain high others proposals allow us work effectively new trading system equitable even reduce foreign barriers keep us competing abroad must also strengthen ability compete means working efficiently well working hard increase productivity means taking greater pride work means fighting harder slow inflation means keeping federal spending things 1973 usher new era prolonged growing prosperity united states unlike past booms new prosperity depend artificial stimulus war eaten away blight inflation solid steady sustainable act responsibly new prosperity many years come franklin roosevelt warned could wrecked rocks loose fiscal policy choice let us choose responsible prosperity thank good afternoon
good afternoon tomorrow send congress economic section state union report one fact stand others report first time nearly 20 year look forward genuine prosperity time peace people talk economy brings mind vast complicated machine today want talk economy personal impact family basically economy affect three way first affect job plentiful secure good second affect take home job much buy income finally affect much spend much pay back government tax let u look briefly element begin job picture today encouraging number people work country rise million 1972 large increase 25 year unemployment fell 6 percent level 1971 5 percent last month record even remarkable since many people seek job usual nearly 3 million american release defense relate job since 1969 include million veteran woman teenager also look work record number yet job group increase even faster reason success economy grow 6 percent last year one best performance past quarter century economic adviser expect growth rate nearly 7 percent 1973 would bring unemployment around 4¼ percent level second great question much take home job much buy news also good people work get work average per capita income rise percent 1972 well average gain previous 10 year important however gain wipe rise price often 1960 federal government spend much fast period result runaway inflation wage may climb rapidly year purchase power change inflation rate last year cut nearly half 4 year ago purchase power average worker pay rise last year year since 1955 go percent equivalent two extra weekly paycheck expect reduce inflation even 1973 several reason fundamental reason nation grow opposition big spending good chance best year curb growth federal budget anything else protect family budget force work u productivity increase sharply last year mean average worker produce therefore earn without drive price high addition fact real spendable earnings rise substantially last year encourage reasonable wage demand year worker catch early slump earnings finally new system wage price control one right kind system 1973 idea control virtually end totally wrong still firm control still enforce firmly change method enforce old wage price control system depend washington bureaucracy approve major wage price increase advance although effective lasted system begin produce inequity get tangle red tape new system avoid danger like law relies largely voluntary cooperation american people people fail cooperate mean crack would like phase iii voluntary possible make mandatory necessary new system control broad support business labor keystone successful program prepare u day long need control allow u concentrate area inflation troublesome construction health care especially food price let focus moment food price rise sharply wholesale level recent month figure retail price january february publish inevitably show sharp increase fact probably see increase food price month come underlie problem food supply rise fast enough keep rapidly rise demand must accept rise food price permanent feature american life must halt inflationary spiral attack cause rise food price front first priority must increase supply food meet increase demand government already move vigorously expand food supply encourage farmer put acreage production crop livestock allow meat dry milk come abroad end subsidy agricultural export reduce government agricultural stockpile encourage farmer sell stock measure stop rise wholesale food price slow rise retail food price unfortunately much price next month powerful effect second half year bring relief american housewife without damage prosperity farmer farm income today high ever go even high increase farm production reason good chance reduce overall inflation rate 2 percent less end 1973 mean dollar go local shop supermarket third important economic question concern much money control much pay tax picture also promise since 1950 share average family income take tax united state nearly double 20 percent average person work less 1 hour day pay tax 1950 today work nearly 2 hour day tax collector wonder someone describe taxpayer person take civil service examination work federal government fact tax cut adopt first term average worker pay increase last year would wipe entirely increase tax way stop tax increase stop spending present tax rate produce revenue cut back federal program waste taxpayer money example housing program benefit shortchange poor health program build hospital hospital bed surplus educational bonus attract people teach ten thousand teacher already find job old program may appeal name may sound like good cause behind fancy label often lie dismal failure unless cut back program fail soon run money program succeed charge budget cut show lack compassion disadvantage best answer charge look facts budget 66 percent help poor next year case 4 year ago 67 percent help sick 71 percent help older american 242 percent help hungry malnourish altogether human resource budget nearly double 4 year ago come office already shift spending priority defense program human resource program must also switch spending priority program give u bad return dollar program pay show truly care needy question whether help help eliminate program wasteful concentrate program work recent round budget cut save 11 billion fiscal year 19 billion next fiscal year 24 billion year mean average save 700 next 3 year america 75 million taxpayer let turn finally one major economic decision make last week proposal change relative value dollar trading abroad take step serious trade imbalance could threaten prosperity america recently buy country buy u company go indefinitely buy sell neither country change exchange rate help u change picture mean export price competitively international marketplace therefore sell good import hand grow fast step must follow reform basic first need flexible international monetary system one lead balance without crisis united state set forth fundamental proposal system last september time nation join u get action proposal second american product must get fair shake world trade extend american market expand american job country make harder product sell abroad trade imbalance grow bad soon propose congress new trade law would make easy u low trade barrier country low also raise barrier necessary keep thing fair overall goal reduce trade investment barrier around world decline one country remain high others proposal allow u work effectively new trading system equitable even reduce foreign barrier keep u compete abroad must also strengthen ability compete mean work efficiently well work hard increase productivity mean take great pride work mean fight hard slow inflation mean keep federal spending thing 1973 usher new era prolong grow prosperity united state unlike past boom new prosperity depend artificial stimulus war eat away blight inflation solid steady sustainable act responsibly new prosperity many year come franklin roosevelt warn could wreck rock loose fiscal policy choice let u choose responsible prosperity thank good afternoon