Jimmy Carter on Budget & Economy

	Jimmy Carter on Budget & Economy President of the U.S., 1977-1981

1980s: Limited bank lending & money supply

Jimmy Carter named Paul Volcker as Federal Reserve chair in the summer of 1979, Carter's second appointment to that position. Volcker immediately and persistently tried to implement the monetary half of the old 1960s policy mix. He raised interest rates in 1979, acquiesced to Carter's request for limits in bank lending in 1980, and restricted the money supply in 1981. "Tight money" it was, but inflation stayed in the double digits. Volcker's first several years at the helm of the fed showed the monetary vigilance, on its own, will not be effective unless accompanied by growth oriented fiscal policy. The result will be noninflationary growth.

Carter was not going to cut tax rates, committed as he was to increasing tax progressivity--even though as his hopeless reelection prospects became clear in the summer of 1980, he floated the idea of some sort of general 5 percent cut in income taxes.

Source: JFK and the Reagan Revolution, by Lawrence Kudlow, p.205-6 , Sep 6, 2016

Failed to control inflation and unemployment

On assuming office in 1977, President Carter inherited an economy that was slowly emerging from a recession. He had severely criticized former President Ford for his failures to control inflation and relieve unemployment, but after four years of the Carter presidency, both inflation and unemployment were considerably worse than at the time of his inauguration. The annual inflation rate rose from 4.8% in 1976 to 6.8% in 1977, 9% in 1978, 11% in 1979, and hovered around 12% at the time of the 1980 election campaign. Although Carter had pledged to eliminate federal deficits, the deficit for the fiscal year 1979 totaled $27.7 billion, and that for 1980 was nearly $59 billion. With approximately 8 million people out of work, the unemployment rate had leveled off to a nationwide average of about 7.7% by the time of the election campaign, but it was considerably higher in some industrial states. Source: Grolier’s Encyclopedia, “The Presidency” , Dec 25, 2000

OpEd: Lacked understanding of bond market

One of the criticisms of Jimmy Carter had been his woeful lack of understanding and appreciation of the bond market. Carter had allowed interest rates to skyrocket, probably one of the mistakes that had doomed his presidency. Source: The Agenda, by Bob Woodward, p. 62 , Jun 6, 1994

We are winning against unemployment; now focus on inflation

Together, we've already begun to build the foundation for confidence in our economic system. During the last 2 years, in bringing our economy out of the deepest recession since the 1930's, we've created 7,100,000 new jobs. The unemployment rate has gone down 25%. And now we must redouble our fight against the persistent inflation that has wracked our country for more than a decade.

Inflation is a burden for all Americans, but it's a disaster for the poor, the sick, and the old.

I outlined a balanced anti-inflation program that couples responsible government restraint with responsible wage and price restraint. It's based upon my knowledge that there is a more powerful force than government compulsion--the force created by the cooperative efforts of millions of Americans working toward a common goal. Business and labor have been increasingly supportive. It's imperative that we in government do our part. We must stop excessive government growth, and we must control government spending habits.

Source: Pres. Carter's 1979 State of the Union message to Congress , Jan 23, 1979

Balance budget by shifting taxes and employing people

The putting back to work of our people is a top priority. This is an effort that ought to be done primarily by strong leadership in the White House, and tapping business, agriculture, industry, labor and government to work on this. We'll never have a balanced budget until we get our people back to work. Another important aspect of our economy would be to hold down on individuals, and to shift the tax burdens onto those who have avoided paying in the past. Source: The First Carter-Ford Presidential Debate , Sep 23, 1976

Balance budget by 1981 by zero-based assessments

If I'm elected president that's going be a top priority to completely revise the structure of the federal government, to make it economical, efficient, purposeful and manageable. I'm going to institute zero-based budgeting, which assesses every program every year, and eliminates those programs that are obsolete. We will have a balanced budget by 1981, if I'm elected president. It's predicated on very modest projections of employment increases and growth in our national economy. Source: The First Carter-Ford Presidential Debate , Sep 23, 1976

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