JFK: April 19th, 1963 - How Federal Spending Fuels A Stronger Economy

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Chapters

• 0:00 Setting The Moment And Mandate
• 0:31 From Crisis Abroad To Focus At Home
• 1:30 Demystifying Government And The Budget
• 2:24 Spending, Taxes, And Economic Activity
• 3:08 The Cost Of Cutting Too Deep
• 3:41 Prudent Investment And National Strength

Transcript

SPEAKER_01: 0:00

The President's remarks to the American Society of Newspaper Editors from the Statler Hilton Hotel in Washington, D.C., April 19th, 1963.

unknown: 0:16

Mr.

SPEAKER_01: 0:16

President, directors, editors. Two years ago, tomorrow, we met in this city at a painful moment in the history of this country and in the history of this administration. I told you then that we intended to profit from this lesson, and I think we have. I told you that we intended to intensify our efforts on behalf of freedom, and I think we have. And I told you then that this government would not hesitate to take the initiative in this hemisphere in meeting its primary obligations to our security whenever that should prove necessary. In last October, we acted to meet those obligations and are prepared to do so again when necessary. In part as the result of last October's events, there is today more widespread assurance that both peace and freedom can prevail in the world. And while our vigilance cannot be relaxed, there is a tendency among many of your readers, as well as your writers, to devote more attention to our domestic scene and to the quality of life on these shores, and I think it's very appropriate that we should do so. Unfortunately, too many of your readers find domestic affairs as baffling as foreign. Government seems too remote, too big, too complex. A tax cut they can understand, but the rest of this year's legislative program seems only a distant blur. They think it's for someone else, not for them. That it's an expense, not an investment. That it could all be cut out without harm to the economy or the nation. And it could be done in the interests of helping a tax cut. The fact of the matter is, if it were not for federal aid to hard press state and local governments, the federal cash budget today would be in balance. The federal government is the people, and the budget is a reflection of their needs. There is another aspect to cutting the budget, which goes beyond the merits of each individual item. And that is the way in which federal expenditures, in much the same way as federal taxes, help determine the level of activity in the entire American economy. This is not some theoretical abstraction, but a hard historical fact. We all praise tax reduction because it releases money into the private sector, but so do federal expenditures. Through contracts, salaries, purchases, pensions, grants and aid, loans, and all the rest. To cut a dollar of expenditures for every dollar of taxes cut would be to remove with one hand the stimulus we give with the other. Let us understand then that every dollar cut in federal expenditures cuts even more from our gross national product. A cut of five billion dollars now from the proposed federal budget, as many have suggested, would cause one million fewer jobs by the end of the fiscal year. It would offset all the benefits which the tax cut could have brought by then. And if that lower level of expenditures were maintained thereafter, it would eventually cause not only a recession, but an even greater budgetary loss which comes from a recession. Federal spending is not an end in itself. It must be held to reasonable limits that are consistent with the needs of the economy as well as our country and the risks of inflation as well as recession. But I am saying that carefully screened and selected federal expenditure programs can play a useful role, both singly and in combination. There will be debate as to detail. There will be differences of dimensions and degree. But I think we should get on with the main task of strengthening the American nation, of opening a road on which all of us can travel, to serve in the future as we have in the past, not only as an inspiration to the world, but also as an example.

SPEAKER_00: 4:16

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