In November of 1952 General Dwight D. Eisenhower was elected to the office of President of the United States. It was the first time a Republican was elected since Herbert Hoover in 1928. The Eisenhower administration started at a rather awkward time, both politically and economically. First of all, there was a war on. The Korean War had begun in June of 1950 and was still waging. As was usual for wartime the country was economically prosperous. However, the war had caused President Truman to abandon his former restraints on government spending. The amount of money being spent on defense skyrocketed to supply the troops in Korea with the supplies they needed. This caused the federal deficit to increase dramatically (Pach and Richardson, 53). Another legacy leftover from the Truman days was that of the Fair Deal domestic program. Although Truman found much opposition to his programs in Congress he managed to get several things done. Such as a public housing bill, an expansion of social security coverage, and increased minimum wages.
The Republican party was not in favor of the majority of this legislation. Thus when Eisenhower was elected they immediately made plans for cutbacks in the spending on these programs. Unfortunately for them, the newly elected president was not opposed to the programs Truman had begun and improved upon. Over the course of his administration, Eisenhower often did not hold the same opinions as some of the members of his party. As the Chief Economic Advisor to the President of the United States, there are many different issues that I must consider. These issues are both large and small, foreign and domestic, and affect the upper, middle, and lower classes. At this point in time, there are several important concerns, which I have. The Korean War is ending and this is going to have a profound effect on the economy of the United States. During the war the country was prosperous but afterward, there is always a high risk of increased inflation and an increase in unemployment.
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These conditions have the ability to cause a recession. Now that an armistice has been reached in Korea, a recession is beginning to occur (Pach and Richardson, 54). I believe that the President’s chief concern should not be to make an immediate and fast-acting restoration of the general economy. The problems of the federal deficit and the recession must wait until the more important problems are dealt with. The problem at hand is the rising rate of unemployment. This problem must be dealt with immediately with strong actions. I suggest implementing federal public works projects as a way of creating jobs without burdening the government with additional expenses. Ideas for these public works projects are the construction of a Saint Lawrence Seaway, and an Interstate Highway System. This system would be a massive undertaking and would be one of the largest construction projects of all time but it would create many jobs for Americans who are no longer employed by the war effort (Branyan and Larsen, 251).
The Republican Party has not been happy with the nation’s economic policies for quite some time. These are the policies of the Democrats and more specifically those of the New Deal and the Fair Deal. These social programs, such as social security and welfare have been a drain on the federal budget for quite some time. Republicans feel that the time has come to start cutting back the amount of money being spent on such programs or at least curtail the yearly increases. However, there are times when political leader must make their own decisions and not base the way they run their administration on the influences from their party. It would be better for the economic health of the nation to maintain all of the social programs started under the Roosevelt and Truman administrations. While this would normally pose a problem to the federal budget it will not due to current conditions. The amount of money formerly spent on national security, meaning military and defense spending has been severely reduced (Albertson, 139). This frees up a large amount of money to be used for other goals.
These goals should be those of improving the standard of living for each and every American and not the immediate reduction of taxes, a goal which many members of the Republican party would like to see pursued. The programs initiated in the policies of the New Deal and Fair Deal should not simply be maintained, instead, they should be expanded upon. I suggest that the Social Security system be amended to include benefits for self-employed farmers and disabled workers. While there is much work to be done on economic policy domestically, foreign policy must be dealt with as well. One of the most important aspects of foreign economic policy is that of trade. There are different ways for a government to legislate trade. It can be done from a protectionist position or from a more free trade position. In a protectionist position, the government is aiming to ensure American businesses and at the same time decrease the number of sales of foreign business. The fastest method for accomplishing this task is to increase tariffs, as in taxes on foreign goods coming into the country. When these taxes are high it costs the foreign companies much more to ship goods into the United States.
In order to compensate for these costs, the companies must increase the price of their goods. When people in American see foreign goods for outrageous prices and then they see American goods for normal prices then they are going to buy American products. Unfortunately, this is not the only effect of a protectionist policy. Foreign nations often get upset at the increase in American tariffs and respond by increasing their own tariffs on American goods. This weakens the sales of American goods in foreign nations. In order for the United States to have a favorable balance of trade then they must have strong exports. This is where a free trade policy comes in. In a free trade policy, tariffs are lowered, allowing more goods to be imported to the United States. Foreign nations will see the lowered tariffs in the United States and respond by lowering their tariffs on American goods. This will increase the overall trade between the United States and nations abroad.
The Republican party would like to see a return to more protectionist policies. However, I feel it should be the job of the President to guide the Grand Old Party away from such a viewpoint (Bonker, 58). Instead of trying to increase tariffs, President Eisenhower should attempt to renew the Reciprocal Trade Act so that he will have the power to lower tariffs by as much as fifteen percent. With the tariffs lowered foreign countries will respond favorably. This will produce more commerce and be beneficial to the United States’ balance of trade. Another measure that should be taken in order to bolster American trading and overseas investments is to decrease the corporate taxes to a percent much lower than the domestic rate on income earned through foreign subsidiaries of U.S. businesses. Trade is essential to overcome the dollar gap that prevented foreign marketing of United States goods (Melanson and Mayers, 159).
There are many economic issues that face the nation at this time. There was a recovery from World War II and the Korean War, a recession, a change in the political party of the president, and several other issues. Thus this must be a time of strong economic leadership. The policies made and the legislature passed must steer the United States through this apparent storm and give the nation a chance to rest from the hecticness of the first half of the century. For in that half a century the country faced World War I, World War II, and the Great Depression. Now is a time when the nation must rest up and regain its strength for the most assuredly hard times to come. During President Eisenhower’s term in office, one word must describe the economic policy, stability. The country does not need risky ventures and bold new ideas, the country needs to hold on to its previous economic standpoints. The only new policies implemented should be those to combat new issues that arise during the Eisenhower presidency.
Thus all of the economic advice I have given President Eisenhower serves one main purpose. That is to ensure the economic stability and prosperity of the United States of America. In 1953 I took office and began to serve as President Eisenhower’s chief economic advisor. I quickly assessed the economic stature of the nation and began to plan my policies for the future. I was aware of what I wanted to accomplish and how I planned to achieve my goals. I advised the President on many keys and important economic issues of our time. When I think back I must decipher whether or not the policies I implemented were successful. At the time I thought what I was doing was right but as the saying goes “hindsight is twenty-twenty” and I can only truly tell if I was successful by looking back upon my work and taking an overview of it. As I look back upon my time in office I come to a very distinct conclusion. I believe that I was successful in achieving the economic goals which I set out for. Through my suggested policies regarding social security, I made Americans more secure in their jobs and their government. Through my suggested policies regarding works programs, I created countless jobs for Americans who desperately needed them, especially in a time directly after a major war.
In regards to the foreign economic policy, I was also very successful. The trading of the United States was booming. U.S. products were being produced and sold around the world. By the 1956 fiscal year, the Treasury showed an impressive surplus (Pach and Richardson, 55). The success of the nation’s economy would prove to be imperative for the time. As the country entered the Cold War the focus needed to be placed on the Soviet Union, national security, and defense. The economy had to be stable because we could not afford to worry about its well-being in a time of such political strife. The United States had very specific needs during the fifties. The country needed a strong military to compete with the Soviet Union, a strong government to legislate, and a strong economy to back it all up. The policies I helped to implement were the ones that met the needs of the times. After a war, a nation needs stability, and my policies and programs provided this stability which allowed the United States to adequately recover from World War II and the Korean War so that the country would be able to fight future battles.
Works Cited List
- Albertson, Dean. Eisenhower As President. New York: Hill and Wang, 1963
- Ambrose, Stephen E. Eisenhower. New York: Simon and Schuster, 1970
- Bonker, Don. America’s Trade Crisis. Boston: Houghton Mifflin Company, 1988
- Branyan, Robert L., Larsen, Lawrence H. The Eisenhower Administration 1953-1961. New York: Random House, 1971
- Melanson, Richard A., Mayers, David. Reevaluating Eisenhower American Foreign
- Policy in the 1950s. Urbana and Chicago: University of Illinois Press, 1987
- Pach, Chester J. Jr., Richardson, Elmo. The Presidency of Dwight D. Eisenhower.
- Kansas: University Press of Kansas, 1991