Gerald Ford on Budget & Economy President of the U.S., 1974-1977; Republican Rep. (MI)

1974: Whip Inflation Now, "WIN", became national punch line

The President decided to introduce his new economic proposal to the public in a televised address to Congress in early October 1974. The speech urged Americans to make up "a list of ten ways to fight inflation and save energy." But to deliver a speech that sought to address a severe economic downturn with gimmicky catchphrases and buttons was not, in my view, presidential.

The response to the speech was not what Ford had hoped. Wearing a pin to defeat inflation became a national punch line.

Tax cuts are the best way to stimulate the economy

Balance government & individual; cut government growth to 5%

The time has come for a fundamentally different approach--for a new realism. We must introduce a new balance to our economy--a balance that favors not only sound, active government but also a much more vigorous, healthy economy that can create new jobs and hold down prices. We must introduce a new balance in the relationship between the individuals and the government-a balance that favors greater individual freedom and self-reliance.

Ford to New York City: Drop Dead

"One week ago, NYC tottered on the brink of financial default. I can tell you now that I am prepared to veto any bill that has as a purpose a federal bailout of NYC to prevent a default. By giving a federal guarantee, we would be reducing rather than increasing the prospect that the city's budget will ever be balanced. Such a step would be a terrible precedent for the rest of the nation. None of us should now derive comfort from NYC's anguish. But neither can we let that contagion spread."

This approach, I thought, might shock New York's officials into coming to grips with their plight. And what was the result? A New York Daily News headline that read: "Ford to City: Drop Dead."

As a result of my tough stand, NYC officials finally adopted budget cuts and a financial plan that would prevent default. We lent funds to the city when its cash flow was down, at an interest rate 1% higher than the prevailing rate.

Federal "vision" means big spending

Long-term recovery at the cost of short-term suffering

Moratorium on federal spending, to fight recession

Next I was going to propose a 1-year moratorium on all new federal spending programs with the exception of crucial defense and energy-producing measures. I would veto everything else. I would recommend a limit of 5% on federal pay increases in 1975, and I would propose the same ceiling apply to automatic cost-of-living increases that are tacked onto social security payments as well as government and military retirement checks.

I was well aware that this plan contained risks. My proposed tax cut would raise the budget deficit so high that instead of restoring the public's confidence in the economy, it might frighten people out of their wits & could spur a new round of inflation.

Whip Inflation Now: voluntary participation in WIN campaign

Fight economic crises by projecting a steady hand

The reasons we were in this terrible position were fairly clear. One was LBJ's attempt to provide guns and butter simultaneously in the mid sixties. A second reason was Nixon's decision to adopt wage and price controls in 1971. The third reason was the staggering increase in energy costs that followed the 1973 Yom Kippur War. The final factor was the rise in the cost of food: drought had scorched the Midwest in 1974.

Some people believe that all a President has to do to end inflation is to flick a switch. The reality is you must have a sound economic plan--and the guts to stick with it. We tried to show leadership by projecting a clam and steady hand. Some people misinterpreted this by concluding we were stodgy and unimaginative, but that didn't bother me.