Dwight Eisenhower on Budget & Economy
Achieve pay-as-you-go budget instead of increases
It seems to me that I have put in 2/3 of my time fighting increased expenditures in government.
I reviewed some of the work I had done to reduce costs and achieve a sound pay-as-you-go budgetary position.
The administration had cut the roster of federal civil positions by a quarter of a million. We had carefully prepared every military budget so as to support only the essential, shifting the emphasis from traditional or conventional defense to the
development of powerful deterrent forces; had tried (unsuccessfully) to make the interest rates for borrowings from the federal Treasury at least equal to the cost to the government out of business that properly pertained to private industry. In appropri
Source: Waging Peace, by Pres. Dwight Eisenhower, p.218
, Jan 1, 1965
Inflation hurts people; even in times of full employment
If prices and wages were to stay high or go higher in economic contraction, the outlook for stability at other times was bleak.
Why worry, some asked? Why not let prices creep upward forever? Inflation can get out of hand; beginning with a creep,
it can end with a gallop. Inflation hurts people. Price increases averaging merely 1% a year will in 25 years cheapen the dollar by more than 1/5.
Huge federal spending, even when covered completely by tax revenues, can in itself provoke inflation.
When the economy was performing at capacity and the federal budget was in balance, the government should try to increase its surplus by cutting spending, by postponing projects which, however desirable, are not immediately necessary.
For, at a time of full employment, an increase in either federal or private spending will tend to bring on an increase in prices.
Whether or not these things were widely understood, I believed in them.
Source: Waging Peace, by Pres. Dwight Eisenhower, p.379-380
, Jan 1, 1965
Deficit spending is irresponsible and inflationary
My view is unshakable: When the economy is booming and the federal government concurrently is spending so heavily as to create sizable deficits, inflationary pressures are bound to build up and the cost of living can be expected to increase.
This is economic irresponsibility, practiced only by those who believe that next month's profit and loss statement is more important than the long-term and steady growth of a free economy.
Playing with inflation is the height of reckless folly. Plentiful examples past and present, demonstrate the validity of these convictions.
Our overriding purpose was to promote economic growth while keeping prices reasonably stable.
Source: Waging Peace, by Pres. Dwight Eisenhower, p.463-464
, Jan 1, 1965
$168M in spending for harbors & flood control is stupid
1958 brought economic recession which repeated the story of the 1954 recessions: a dip in the economy, frenzied Democratic calls for action, the administration's determination not to panic, and the economy's gradual emergence from difficulty.
example, early in the 1958 session, the Congress passed a stupid bill--I choose the adjective carefully--authorizing appropriations for rivers, harbors, and flood control projects. It authorized 14 projects with an estimated cost of $168 million. On
Apr. 15 I vetoed the bill. I did so despite the specious argument that it would stimulate the economy.
In 1958, just as in 1954, the United Steel Workers once again sketched out a free-wheeling program of federal outlays to end the downturn with little
regard for their likely long-term economic consequences.
In reply I reminisced a bit: "Whenever a crisis occurred, some interested but excitable people began screaming for action. I had only one answer, 'I guess I'm just too stubborn to act fast.'"
Source: Waging Peace, by Pres. Dwight Eisenhower, p.305-306
, Jan 1, 1965
Danger of inflation if government is profligate
Our economy is strong, expanding, and fundamentally sound. But in any realistic appraisal, even the optimistic analyst will realize that in a prosperous period the principal threat to efficient functioning of a free enterprise system is inflation.
We look back on four years of prosperous activities during which prices, the cost of living, have been relatively stable--that is, inflation has been held in check. But it is clear that the danger is always present, particularly if the government
might become profligate in its expenditures or private groups might ignore all the possible results on our economy of unwise struggles for immediate gain.
This danger requires a firm resolution that the Federal Government shall utilize only a prudent share of the Nation's resources, that it shall live within its means, carefully measuring against need alternative proposals for expenditures.
Source: Pres. Eisenhower's 1957 State of the Union message
, Jan 10, 1957
Eliminate the deficit and check the menace of inflation
[The US has an] inescapable need for economic health and strength if we are to maintain adequate military power and exert influential leadership for peace in the world. Our immediate task is to chart a fiscal and economic policy that can:
The first order of business is the elimination of the annual deficit.
This cannot be achieved merely by exhortation. It demands the concerted action of all those in responsible positions in the Government and the earnest cooperation of the Congress.
Source: Pres. Eisenhower's 1953 State of the Union message
, Feb 2, 1953
Reduce the planned deficits and then balance the budget, which means, among other things, reducing Federal expenditures to the safe minimum;
- Meet the huge costs of our defense;
- Properly handle the burden of our inheritance of debt and obligations;
- Check the menace of inflation;
- Work toward the earliest possible reduction of the tax burden;
- Make constructive plans to encourage the initiative of our citizens.
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George W. Bush(R,2001-2009)
George Bush Sr.(R,1989-1993)
John F. Kennedy(D,1961-1963)
Harry S Truman(D,1945-1953)
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