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Economics Of Eisenhower Essay, Research Paper
In November of 1952 General Dwight D. Eisenhower was elected to the office of
President of the United States. It was the first time a Republican was elected since
Herbert Hoover in 1928. The Eisenhower administration started at a rather awkward
time, both politically and economically. First of all there was a war on. The Korean War
had begun in June of 1950 and was still waging. As was usual for wartime the country
was economically prosperous. However, the war had caused President Truman to
abandon his former restraints on government spending. The amount of money being
spent on defense skyrocketed to supply the troops in Korea with the supplies they needed.
This caused the federal deficit to increase dramatically (Pach and Richardson, 53).
Another legacy leftover from the Truman days was that of the Fair Deal domestic
program. Although Truman found much opposition to his programs in Congress he
managed to get several things done. Such as a public housing bill, an expansion of social
security coverage, and increased minimum wages. The Republican party was not in favor
of the majority of this legislation. Thus when Eisenhower was elected they immediately
made plans for cutbacks in the spending on these programs. Unfortunately for them the
newly elected president was not opposed to the programs Truman had began and
improved upon. Over the course of his administration Eisenhower often did not hold the
same opinions as some of the members of his party.
As the Chief Economic advisor to the President of the United States there are
many different issues which I must consider. These issues are both large and small,
foreign and domestic, and affect the upper, middle, and lower classes. At this point in
time there are several important concerns which I have. The Korean War is ending and
this is going to have a profound affect on the economy of the United States. During the
war the country was prosperous but afterward there is always a high risk of increased
inflation and an increase in unemployment. These conditions have the ability to cause a
recession. Now that an armistice has been reached in Korea, a recession is beginning to
occur (Pach and Richardson, 54).
I believe that the President s chief concern should not be to make an immediate
and fast acting restoration of the general economy. The problems of the federal deficit
and the recession must wait until the more important problems are dealt with. The
problem at hand is the rising rate of unemployment. This problem must be dealt with
immediately with strong actions. I suggest implementing federal public works projects
as a way of creating jobs without burdening the government with additional expenses.
Ideas for these public works projects are: the construction of a Saint Lawrence Seaway,
and an Interstate Highway System. This system would be a massive undertaking and
would be one of the largest construction projects of all time but it would create many jobs
for Americans who are no longer employed by the war effort (Branyan and Larsen, 251).
The Republican party has not been happy with the nations economic policies for
quite some time. These are the policies of the Democrats, and more specifically those of
the New Deal and the Fair Deal. These social programs, such as social security and
welfare have been a drain on the federal budget for quite some time. Republicans feel
that the time has come to start cutting back the amount of money being spent on such
programs or at least curtail the yearly increases. However, there are times when a
political leader must make their own decisions and not base the way they run their
administration on the influences from their party. It would be better for the economic
health of the nation to maintain all of the social programs started under the Roosevelt and
Truman administrations. While this would normally pose a problem to the federal budget
it will not due to current conditions. The amount of money formerly spent on national
security, meaning military and defense spending has been severely reduced (Albertson,
139). This frees up a large amount of money to be used for other goals. These goals
should be those of improving the standard of living for each and every American and not
the immediate reduction of taxes, a goal which many members of the Republican party
would like to see pursued. The programs initiated in the policies of the New Deal and
Fair Deal should not simply be maintained, instead they should be expanded upon. I
suggest that the Social Security system be amended to include benefits for self-employed
farmers and disabled workers.
While there is much work to be done on economic policy domestically, the
foreign policy must be dealt with as well. One of the most important aspects of foreign
economic policy is that of trade. There are different ways for a government to legislate
trade. It can be done from a protectionist position or from a more free trade position. In a
protectionist position the government is aiming to ensure American businesses and at the
same time decrease the amount of sales of foreign business. The fastest method for
accomplishing this task is to increase tariffs, as in taxes on foreign goods coming in to the
country. When these taxes are high it costs the foreign companies much more to ship
goods into the United States. In order to compensate these costs the companies must
increase the price of their goods. When people in American see foreign goods for
outrageous prices and then they see American goods for normal prices than they are going
to buy American products. Unfortunately, this is not the only effect of a protectionist
policy. Foreign nations often get upset at the increase in American tariffs and respond by
increasing their own tariffs on American goods. This weakens the sales of American
goods in foreign nations. In order for the United States to have a favorable balance of
trade then they must have strong exports. This is where a free trade policy comes in. In a
free trade policy, tariffs are lowered, allowing more goods to be imported to the United
States. Foreign nations will see the lowered tariffs in the United States and respond by
lowering their tariffs on American goods. This will increase the overall trade between the
United States and nations abroad.
The Republican party would like to see a return to more protectionist policies.
However, I feel it should be the job of the President to guide the Grand Old Party away
from such a viewpoint (Bonker, 58). Instead of trying to increase tariffs, President
Eisenhower should attempt to renew the Reciprocal Trade Act so that he will have the
power to lower tariffs by as much as fifteen percent. With the tariffs lowered foreign
countries will respond favorably. This will produce more commerce and be beneficial to
the United States balance of trade. Another measure that should be taken in order to
bolster American trading and overseas investments is to decrease the corporate taxes to a
percent much lower than the domestic rate on income earned through foreign subsidiaries
of U.S. businesses. Trade is essential to overcome the dollar gap that prevented foreign
marketing of United States goods (Melanson and Mayers, 159).
There are many economic issues which face the nation at this time. A recovery
from World War II and the Korean War, a recession, a change in the political party of the
president, and several other issues. Thus this must be a time of strong economic
leadership. The policies made and legislature passed must steer the United States through
this apparent storm and give the nation a chance to rest from the hecticness of the first
half of the century. For in that half a century the country faced World War I, World War
II, and the Great Depression. Now is a time when the nation must rest up and regain its
strength for the most assuredly hard times to come. During President Eisenhower s term
in office one word must describe the economic policy, stability. The country does not
need risky ventures and bold new ideas, the country needs to hold on to its previous
economic standpoints. The only new policies implemented should be those to combat
new issues that arise during the Eisenhower presidency. Thus all of the economic advice
I have given the President Eisenhower serves one main purpose. That is to ensure the
economic stability and prosperity of the United States of America.
In 1953 I took office and began to serve as President Eisenhower s chief
economic advisor. I quickly assessed the economic stature of the nation and began to
plan my policies for the future. I was aware of what I wanted to accomplish and how I
planned to achieve my goals. I advised the President on many key and important
economic issues of our time. When I think back I must decipher whether or not the
policies I implemented were successful. At the time I thought what I was doing was right
but as the saying goes hindsight is twenty-twenty and I can only truly tell if I was
successful by looking back upon my work and taking an overview of it.
As I look back upon my time in office I come to a very distinct conclusion. I
believe that I was successful in achieving the economic goals which I set out for.
Through my suggested policies regarding social security I made Americans more secure
in their jobs and their government. Through my suggested policies regarding works
programs I created countless jobs for Americans who desperately needed them, especially
in a time directly after a major war. In regards to foreign economic policy I was also very
successful. The trading of the United States was booming. U.S. products were being
produced and sold around the world. By the 1956 fiscal year the Treasury showed an
impressive surplus (Pach and Richardson, 55). The success of the nation s economy
would prove to be imperative for the time. As the country entered the Cold War the focus
needed to be placed on the Soviet Union, national security, and defense. The economy
had to be stable because we could not afford to worry about its well being in a time of
such political strife. The United States had very specific needs during the fifties. The
country needed a strong military to compete with the Soviet Union, a strong government
to legislate, and a strong economy to back it all up. The policies I helped to implement
were the ones that met the needs of the times. After a war a nation needs stability and my
policies and programs provided this stability which allowed the United States to
adequately recover from World War II and the Korean War so that the country would be
able to fight future battles.
Works Cited List
Albertson, Dean. Eisenhower As President. New York: Hill and Wang, 1963
Ambrose, Stephen E. Eisenhower. New York: Simon and Schuster, 1970
Bonker, Don. America s Trade Crisis. Boston: Houghton Mifflin Company, 1988
Branyan, Robert L., Larsen, Lawrence H. The Eisenhower Administration 1953-1961.
New York: Random House, 1971
Melanson, Richard A., Mayers, David. Reevaluating Eisenhower American Foreign
Policy in the 1950s. Urbana and Chicago: University of Illinois Press, 1987
Pach, Chester J. Jr., Richardson, Elmo. The Presidency of Dwight D. Eisenhower.
Kansas: University Press of Kansas, 1991
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