Statement Submitted to Republican National Convention Committee on Resolutions: "The Threat to the American Economy"
Only a hundred days remain before the American people pass the judgment of this generation on the Johnson years. Based on this Administration's role as guardian of the American dollar and trustee of the American economy, that verdict will be guilty of inexcusable neglect.
During the Eisenhower Administration, the United States achieved several economic milestones. Wartime inflation was brought to an end. A stable wage-price relationship was established. A solid foundation was laid on which future prosperity could be built. Yet, in less than 5 years, the Johnson Administration has squandered the inheritance of a decade's solvency.
In 1964 prices for food and clothing and medicine and housing were already moving up at a rate of just under 2 percent. Today, they are rising at more than 4 percent, the most severe inflation since the Truman Administration.
In 1964 America was enjoying a period of relative labor peace. Today, the number of man hours lost annually through strikes has doubled and continues to rise.
In 1964, the Presidential wage guideposts stood at 3.2 percent nationally. In 1968 those wage guideposts have been breached, abandoned and forgotten. Any worker settling for a "Presidential" pay raise in 1968 would be settling for a cut in purchasing power.
In 1964, mortgage interest rates stood at 5.8 percent. By 1966 they had risen to 6.3 percent, setting off a depression in the housing industry. Today, they are over 7 percent, the highest since the Administration of Ulysses S. Grant.
In 1964 American gold reserves amounted to nearly $15 billion. In the last four years, foreign countries have removed $5 billion from America's gold reserves. These reserves have fallen to the lowest level since the Depression.
Why are prices rising faster than they have in a generation? Why is the American dollar viewed with greater suspicion in the central banks of Europe than it has been for a century? Why is the American taxpayer groaning under the heaviest tax burden in history? Why has the purchasing power of the American worker not risen a dime in two years? The answer is one and the same—because for 5 years this Administration has refused to keep federal spending within federal means.
We need more economy in government and less government in the economy.
The total deficit run up in the budgets of the Johnson years will amount to more than $55 billion. This massive deficit has wracked and dislocated the economy; this massive deficit has plunged the free world monetary system into a profound crisis of credibility.
The war in Vietnam is not so much the cause of our economic problems as it is the ready excuse of the Administration. Much less than half the massive new outlays in federal funds in the past 5 years are traceable to the war in Asia. A government that had guided the economy with the prudence and restraint dictated by the expanding war in Asia could have foreseen and avoided every major pitfall in the last 5 years.
The economy cannot afford 4 more years of abuse from irresponsible Federal managers without suffering grave and perhaps permanent damage. The damage done thus far can and must be repaired by a new administration committed to the economics of responsibility. There is nothing the matter with the engine of free enterprise that cannot be corrected by placing a prudent and sober engineer at the throttle.
Needed in Washington today is new leadership with both an understanding of modern economic conditions and an appreciation of traditional economic principles. The new Administration will recognize that deliberate inflation is deliberate injustice—a form of government aggression against the thrifty, the retired and the poor.
In the last five years the Administration has caused the erosion of more than 10 percent of the value of every dollar Americans earn and save. By encouraging this inflation, this Administration has broken faith with our friends abroad and our own people at home. It has stood silently by while they were robbed of 10 percent of their savings and income—and it has profited politically from their losses.
We need a government in Washington that will recognize that economics is more than a question of politics; it is also a question of justice. We need a government that does not weigh a 4 percent increase in the price level in terms of whether it wins or loses friends or votes—but in terms of whether it is right or wrong.
The rising winds of inflation pose no grave threat to the economic bastions of big business and industry and organized labor. But those winds do imperil the economic security and future of those individuals who can find no shelter from the storm in the safe harbors of the real estate market or the stock exchange.
The old politics of spend-and-elect have not only worked an injustice on the American people; they have denied Americans much of its flexibility in dealing with onrushing change. We can and must break out of the vicious circle fashioned by the present Administration. We can and must regain the freedom that comes from sound economic growth sustained by the dynamism of free enterprise.
If our economy enjoys sound expansion I can foresee a gross national product of a trillion dollars by 1972—and I mean a trillion dollars of stable purchasing power. In the same period I can foresee more than 82 million civilian jobs—more than 6 million new jobs in the term of the next President —for the American people, whose wages and well-being would increase in real and not illusory terms.
I believe the American people are more than willing to live, not on inflated promises, but on the real wealth they produce. I believe they are far more mature than their distrustful present leaders assume. I believe a tide of discontent is running deep and strong within the people, a powerful current which will sweep away falsehood and duplicity, and carry our country again to the firm and high ground of principle.
When America was young, hard work and sacrifices were the only way the people knew to put their dreams and ideals into practice. Now that America is mature, at once seasoned and beset, there is still only one way— the way of responsibility.
APP NOTE: From section three of the volume "Nixon Speaks Out" titled, "For a Dynamic Economy".
Richard Nixon, Statement Submitted to Republican National Convention Committee on Resolutions: "The Threat to the American Economy" Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/326768