The present state of our economy is disturbing. We take office in the wake
of seven months of recession, three and one-half years of slack, seven
years of diminished economic growth, and nine years of falling farm
income.
Business bankruptcies have reached their highest level since the Great
Depression. Since 1951 farm income has been squeezed down by 25 percent.
Save for a brief period in 1958, insured unemployment is at the highest
peak in our history. Of some five and one-half million Americans who are
without jobs, more than one million have been searching for work for more
than four months. And during each month some 150,000 workers are exhausting
their already meager jobless benefit rights.
Nearly one-eighth of those who are without jobs live almost without hope
in nearly one hundred especially depressed and troubled areas. The rest
include new school graduates unable to use their talents, farmers forced to
give up their part-time jobs which helped balance their family budgets,
skilled and unskilled workers laid off in such important industries as
metals, machinery, automobiles and apparel.
Our recovery from the 1958 recession, moreover, was anemic and incomplete.
Our Gross National Product never regained its full potential. Unemployment
never returned to normal levels. Maximum use of our national industrial
capacity was never restored.
In short, the American economy is in trouble. The most resourceful
industrialized country on earth ranks among the last in the rate of
economic growth. Since last spring our economic growth rate has actually
receded. Business investment is in a decline. Profits have fallen below
predicted levels. Construction is off. A million unsold automobiles are in
inventory. Fewer people are working--and the average work week has shrunk
well below 40 hours. Yet prices have continued to rise--so that now too
many Americans have less to spend for items that cost more to buy.
Economic prophecy is at best an uncertain art--as demonstrated by the
prediction one year ago from this same podium that 1960 would be, and I
quote, "the most prosperous year in our history." Nevertheless, forecasts
of continued slack and only slightly reduced unemployment through 1961 and
1962 have been made with alarming unanimity--and this Administration does
not intend to stand helplessly by.
We cannot afford to waste idle hours and empty plants while awaiting the
end of the recession. We must show the world what a free economy can do--to
reduce unemployment, to put unused capacity to work, to spur new
productivity, and to foster higher economic growth within a range of sound
fiscal policies and relative price stability.
I will propose to the Congress within the next 14 days measures to improve
unemployment compensation through temporary increases in duration on a
self-supporting basis--to provide more food for the families of the
unemployed, and to aid their needy children--to redevelop our areas of
chronic labor surplus--to expand the services of the U.S. Employment
Offices--to stimulate housing and construction--to secure more purchasing
power for our lowest paid workers by raising and expanding the minimum
wage--to offer tax incentives for sound plant investment--to increase the
development of our natural resources--to encourage price stability--and to
take other steps aimed at insuring a prompt recovery and paving the way for
increased long-range growth. This is not a partisan program concentrating
on our weaknesses--it is, I hope, a national program to realize our
national strength.