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 and must be reduced further. There was a 3.2 percent increase in

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.