Next Tuesday the American people will have to choose between the economic policies of the Republican and Democratic Parties, between the wasteful and shortsighted policies of the past 8 years and the Democratic pledge of a sound fiscal policy designed to strengthen our economy, increase our productivity, and provide increased abundance for all Americans.
For let me make it clear that if elected President, I commit myself and my party to a sound fiscal policy in the sixties.
The failure of our present economic policies has become increasingly evident in the past few months, as the danger signals of economic weakness have begun to mount.
Since last June our gold reserves have declined by almost a billion dollars, and almost $4 billion in gold has left this country in the past 3 years. In 1952 American gold reserves were $11 billion more than the debts we owed to foreigners. But today our foreign debts are $3 billion more than our gold reserves, a dangerous deterioration in our world financial position of almost $15 billion. Certainly this is not the product of sound planning and fiscal responsibility.
In the past few months our estimated tax revenues have dropped $2 billion to $3 billion, a drop which is due not to lower taxes but to steadily decreasing production.
In the last few months our gross national product, the measure of our economic growth, has actually declined by around $8 billion. Our economy not only did not grow fast enough, it actually shrank.
In the last few months the cost of living has reached the highest point in the history of this country, the culmination of a steady price rise over the past 8 years which has lowered the value of the dollar by more than 10 percent.
These are the danger signals, the growing weakness, which has caused many economists to say that we may be entering our third major recession in 6 years. And growing unemployment and declining production tend to confirm this prophecy.
Much of this growing decline in our relative economic strength has been due to Republican failure to realize that a growing economy requires bold and imaginative use of the tools of economic policy and of our abundant resources if that growth is to be maintained and stimulated. But much of it is also due to the wasteful programs of the past 8 years, programs which have consumed our revenues without accomplishing their objective or justifying their cost.
From fiscal 1954 to fiscal 1960 we increased the national debt by more than $21 billion, incurred budget deficits of more than $18 billion, and piled up the largest single peacetime deficits in our history, more than $12 billion in fiscal 1959. And these deficits have been incurred despite Democratic cuts of more than $10 billion from administration spending requests.
In fact this administration, which promised to reduce spending to $60 billion a year and cut down the size of Government, has now spent 46 percent more than Harry Truman, and has added 106,000 new, nondefense, Federal employees to the Government.
Of course we Democrats have programs. And those programs will cost money. But they will not be wasteful programs. They will be soundly financed. And they will return their own cost many times in terms of increased productivity and prosperity for America.
Our farm program, through a system of supply management, is designed ultimately to reduce our vast surpluses and huge agricultural payments while raising farm income. It will reduce the enormous costs of the present program which, in the past 3 years, has cost more than the total cost of price supports in 20 years of Democratic administration. And it will work toward cutting down the expenditures of the Department of Agriculture which has spent more in the past 8 years than all the Departments of Agriculture in our history combined while, at the same time, surpluses increased until we now have over $7 billion worth of unused food in our warehouses.
Our defense program will strengthen our security, but it will also eliminate the expensive duplication of weapons systems, the costly lag between design and production, and the useless waste in procurement practices which add nothing to strength but which cost billions of dollars. For example, a recent investigation into Armed Forces procurement disclosed that we had been paying $21 for a wall socket worth a quarter. And this was only one of hundreds of similar examples.
Our interest rate policies will stimulate economic growth, but they will also tend to relax the artificially high and rigid rates which have added $3 billion a year to the cost of the national debt, increased the cost of living for every American who finances a car or a house or a television set, and failed to keep prices from rising.
And all our other programs also - investments, which in the future, as in the past, will repay their own cost many times over by creating the growing expanding economy which will increase our abundance as well as the flow of revenues to the Treasury.
I know something of waste in Government. I served as the chairman of the Senate subcommittee which held hearings on the Hoover Commission report, and which steered 30 bills through Congress to carry out its recommendations - bills which former President Hoover said would save the Government billions of dollars.
But I also believe that it is not enough to combat waste. We must do more than try to save what we have. We must work to increase our productivity, our national wealth, and our national strength through sound programs of investment in the future of America - and through sound economic policies.
First, we Democrats do not intend to devalue the dollars from its present rate. We will defend its value and its soundness.
Second, we will seek a balanced budget over the years of our administration - seeking a budget surplus as a brake on inflation in times of prosperity.
Third, we will place less reliance on the high-interest-rate policy which has discouraged the investment which is vital to a growing economy - and which has been a major contribution to our current rate of business failure, the highest since the great depression.
Fourth, we will immediately begin a large-scale effort to reverse our present economic decline and increase our rate of growth - bringing help to depressed areas - developing our resources - dealing with the problem of automation - eliminating obsolete restrictions on our exports. For perhaps the greatest economic waste of the past 8 years has been the enormous waste of idle plants and idle men - waste which, economists estimate, has cost the United States hundreds of billions of dollars in the past 8 years - money which would have meant an improved standard of living for every man and woman in the United States.
Thus, the choice in this campaign is not only between a party committed to a sound fiscal policy, and a party which has wasted our revenues and our resources - it is also between a party with bold and imaginative programs, which intends to develop our economy to new heights of productivity and abundance and meet the urgent unmet needs of our people - and a party which has lacked faith in the future of the American economy and has failed to move America forward.
And I am confident that, confronted with that decision, the people of Virginia, like the people of all America, will choose the Democratic Party.