Economy In the 1960s
Overview
Compared to the 1950s, where automobiles and electrical consumer gadgets were the rage, the United States in the 1960s saw the rise of housing and the computer industry. During this decade industrial corporations dominated over 12% of big manufacturing business and the country experienced it's longest running economic expansion period in history.Companies like Ford, General Motors and Standard Oil of New Jersey in 1965 made more money than every farm in the United States. 1965 saw America’s investment overseas increase to $49.2 billion.
John F Kennedy began his 1960 campaign faced with a slow moving economy and an unemployment rate of 7%. He made it a campaign promise “ to get America moving again “.Goals of of 4-6 percent growth and 4% unemployment were put forward. Kennedy sent congress a twelve measure economic growth and recovery package, knowing that the economy was in trouble. The measures included an increase in the minimum wage from $1.00 to $1.25 per hour, covering more workers. The compensation for unemployed workers was also increased including aid to their children. Implemented for more people was increase social security benefits, as was emergency relief for feed grain farmers, area redevelopment, vocational training for displaced workers, and federal funding for home building and slum eradication. When 1962 came around, Kennedy knew the economy could do with additional stimulation. When industry giant US Steel made an announcement that it was raising it's prices, Kennedy was furious. Several weeks previous, he had convinced the steelworkers union to cut down its wage demands. Kennedy's anger made its way to the press, and fearing an administration retaliation on big business, the stock market plummeted on May 28th, experiencing the worst single day crash since the October 28th launch of the depression of 1929.
Kennedy knew he had to gain the trust of the business community, and thought a tax cut could provide this. He took a pro business stance and suggested a business tax relief provided by liberalizing the depreciation allowance on new plants and equipment and by giving business a 7 percent investment tax credit.
At the beginning of 1963 inflation was stable, big business profits were at a record high, and the stock market had come back. Although, unemployment was still way too high at 5.7%, by 1966 5.5 million more Americans were employed than when Kennedy was first elected.
When Lyndon Johnson took over the presidency in 1964, he came in to a strong economy, bolstered by former president Kennedy. $4-5 billion in additional revenues between 1964 and 1965 were attributed to the growth in the economy. Johnson, coming from a rural teaching background, was dedicated to eradicate the suffering of America's poor and elderly. He proposed federal programs supporting medical insurance for the elderly (Medicare), aid to schools and training for those who lacked skills and education, as well as overall public health measures. These proposals were labeled "The Great Society". From 1963 to 1965 inflation was under 2 percent. Although in mid 1965 inflation began to pick up slightly, the gross national product (GNP) continued to grow by $9 billion and unemployment remained at 1.4 percent. At the end of 1966, real growth was 9% and unemployment 3.8% so the economy was steady and seemingly improving. By 1967 Johnson's administration became concerned with inflation. On August 3 a temporary 10 percent income tax surcharge was requested of congress and on June 28 1968 that surcharge became law and was tied to a $6 billion budget reduction. By 1968, Lyndon Johnson's last month in office, the United States was spending 22 billion per year on the war in Vietnam, inflation had sored to 4.7% and at the same time the growth and unemployment rates were only 4% and 3.3% respectively.
Although Johnson had managed to fund both the war in Vietnam and the proposals of "The Great Society" without establishing new revenue sources, inflation began to creep up. By the time Richard Nixon was into his first year of the presidency, in 1970, inflation was at 6.5%.
By the end of the decade the average American's real income had increased 50 percent. Median family income rose from $8,540 in 1963 to $10,770 by 1969.
On the other hand, Medicare costs in 1966 were $3 billion but it's legacy by 2003 had increased it to 244 billion. However, it is only fair to mention that the costs of "The Great Society" may be offset by the benefits. By 1970 poverty had been cut in half. Infant mortality rates were down by one third, and Americans being able to visit a doctor increased from 8% to 20%.
Compared to the 1950s, where automobiles and electrical consumer gadgets were the rage, the United States in the 1960s saw the rise of housing and the computer industry. During this decade industrial corporations dominated over 12% of big manufacturing business and the country experienced it's longest running economic expansion period in history.Companies like Ford, General Motors and Standard Oil of New Jersey in 1965 made more money than every farm in the United States. 1965 saw America’s investment overseas increase to $49.2 billion.
John F Kennedy began his 1960 campaign faced with a slow moving economy and an unemployment rate of 7%. He made it a campaign promise “ to get America moving again “.Goals of of 4-6 percent growth and 4% unemployment were put forward. Kennedy sent congress a twelve measure economic growth and recovery package, knowing that the economy was in trouble. The measures included an increase in the minimum wage from $1.00 to $1.25 per hour, covering more workers. The compensation for unemployed workers was also increased including aid to their children. Implemented for more people was increase social security benefits, as was emergency relief for feed grain farmers, area redevelopment, vocational training for displaced workers, and federal funding for home building and slum eradication. When 1962 came around, Kennedy knew the economy could do with additional stimulation. When industry giant US Steel made an announcement that it was raising it's prices, Kennedy was furious. Several weeks previous, he had convinced the steelworkers union to cut down its wage demands. Kennedy's anger made its way to the press, and fearing an administration retaliation on big business, the stock market plummeted on May 28th, experiencing the worst single day crash since the October 28th launch of the depression of 1929.
Kennedy knew he had to gain the trust of the business community, and thought a tax cut could provide this. He took a pro business stance and suggested a business tax relief provided by liberalizing the depreciation allowance on new plants and equipment and by giving business a 7 percent investment tax credit.
At the beginning of 1963 inflation was stable, big business profits were at a record high, and the stock market had come back. Although, unemployment was still way too high at 5.7%, by 1966 5.5 million more Americans were employed than when Kennedy was first elected.
When Lyndon Johnson took over the presidency in 1964, he came in to a strong economy, bolstered by former president Kennedy. $4-5 billion in additional revenues between 1964 and 1965 were attributed to the growth in the economy. Johnson, coming from a rural teaching background, was dedicated to eradicate the suffering of America's poor and elderly. He proposed federal programs supporting medical insurance for the elderly (Medicare), aid to schools and training for those who lacked skills and education, as well as overall public health measures. These proposals were labeled "The Great Society". From 1963 to 1965 inflation was under 2 percent. Although in mid 1965 inflation began to pick up slightly, the gross national product (GNP) continued to grow by $9 billion and unemployment remained at 1.4 percent. At the end of 1966, real growth was 9% and unemployment 3.8% so the economy was steady and seemingly improving. By 1967 Johnson's administration became concerned with inflation. On August 3 a temporary 10 percent income tax surcharge was requested of congress and on June 28 1968 that surcharge became law and was tied to a $6 billion budget reduction. By 1968, Lyndon Johnson's last month in office, the United States was spending 22 billion per year on the war in Vietnam, inflation had sored to 4.7% and at the same time the growth and unemployment rates were only 4% and 3.3% respectively.
Although Johnson had managed to fund both the war in Vietnam and the proposals of "The Great Society" without establishing new revenue sources, inflation began to creep up. By the time Richard Nixon was into his first year of the presidency, in 1970, inflation was at 6.5%.
By the end of the decade the average American's real income had increased 50 percent. Median family income rose from $8,540 in 1963 to $10,770 by 1969.
On the other hand, Medicare costs in 1966 were $3 billion but it's legacy by 2003 had increased it to 244 billion. However, it is only fair to mention that the costs of "The Great Society" may be offset by the benefits. By 1970 poverty had been cut in half. Infant mortality rates were down by one third, and Americans being able to visit a doctor increased from 8% to 20%.
Specifics: Timeline of 1960 - 1969 Economy
May 5, 1961
Minimum Wage Hike
President John F. Kennedy signs legislation raising the minimum wage in stages from its current $1 per hour to $1.25 per hour by September 1963.
Minimum Wage Hike
President John F. Kennedy signs legislation raising the minimum wage in stages from its current $1 per hour to $1.25 per hour by September 1963.
Feb 26, 1964
Johnson Slashes Taxes
President Lyndon Johnson signs the Tax Reduction Act lowering income tax rates from a range of 20-91% to 14-70%. Corporate rates are reduced from 52% to 48%.
Johnson Slashes Taxes
President Lyndon Johnson signs the Tax Reduction Act lowering income tax rates from a range of 20-91% to 14-70%. Corporate rates are reduced from 52% to 48%.
Aug 30, 1964
LBJ Signs Jobs Bill
President Lyndon Johnson signs the Economic Opportunity Act, one of the centerpieces of his domestic agenda. In order to combat unemployment and poverty, the act allocates funds for job training, adult education, and loans to small businesses. VISTA, the Job Corps, and Head Start are also administered by the Office of Economic Opportunity.
LBJ Signs Jobs Bill
President Lyndon Johnson signs the Economic Opportunity Act, one of the centerpieces of his domestic agenda. In order to combat unemployment and poverty, the act allocates funds for job training, adult education, and loans to small businesses. VISTA, the Job Corps, and Head Start are also administered by the Office of Economic Opportunity.
July 30, 1965
LBJ signs Medicare bill
LBJ signs Medicare bill
Sep 23, 1966
Minimum Wage Increase
The minimum wage is raised in stages from its current $1.25 per hour to $1.60 by February 1968.
Minimum Wage Increase
The minimum wage is raised in stages from its current $1.25 per hour to $1.60 by February 1968.
Page Written By: Elana Bravo