Economic Report Of Ford Essay, Research Paper
Economic Policies of Gerald Ford
In 1974, there was a large rise in oil prices which gave a large amount of
purchasing power to the oil-producing companies. “Inflation, strong demands for
credit, and the unwillingness of the monetary authorities to underwrite a continued
acceleration of inflation drove interest rates upward, causing a slump in
housing.”(The Economic Report of the President 1975) Another weakening effect of
the higher and “variable” rate of inflation was how uncertain the nation was
regarding future rates of price increase.
When 1975 began, the unemployment rate was at the highest level it had
been in seventeen years. Production and unemployment were declining very fast.
To increase business and industry and to create new jobs, Ford proposed a one year
tax reduction of $16 billion. He said that three-quarters would go to individuals and
one-quarter would be used to promote business investment. Ford said in his 1975
State of the Union Address that “cutting taxes now is essential if we are to turn the
economy around. He also proposed a program that he said would “begin to restore
our country s surplus capacity in total energy. In this way we will be able to assure
ourselves reliable and adequate energy and help foster a new world energy stability
for other major consuming nations.”
In 1976, the unemployment rate had declined by one percentage point, but it
was still too high
employment in 1976. Real gross national product (GNP) rose by 6.2 percent, and
employment rose by almost 3 million people.
In President Ford s 1976 State of the Union Address, he asked for additional
housing assistance for 500,000 families. He felt that those programs would expand
housing opportunities, stimulate construction, and help to house moderate-income
and low-income families. Ford proposed tax changes to encourage people to invest
in “America s future,” that would give moderate-income families income tax
benefits if they make long-term investments in common stock in American
companies.
In 1977, President Ford proposed a permanent tax cut for individuals and
corporations which would reduce tax debt by about $12.5 billion in 1977. Ten
billion dollars of that would go to individuals in the form of “higher percentage
exemptions, an increase in the low-income allowance, and lower tax rates.”(The
Economic Report of the President 1977) The remaining $2.5 billion would go to
corporations in the form of “a 2 percentage point reduction in the corporate income
tax rate.”
In 1977, Ford also recommended an “energy program which stresses
expanded domestic energy production and increased utilization of our most
abundant resources, particularly coal.” Higher prices for oil in the short run would
reduce the “relative share” of imported oil and gas in total energy consumption.