Gerald Ford on Budget & Economy
President of the U.S., 1974-1977; Republican Rep. (MI)
1974: Whip Inflation Now, "WIN", became national punch line
The President embarked on a program called Whip Inflation Now or WIN. Inflation hovered at above 10 percent. The price of gas had jumped sharply, from thirty-nine cents a gallon in 1973 to fifty-three cents in 1974. The American people clearly wanted
something to be done about the economy, and Ford decided to take action. The idea behind WIN was to treat the nation's economic woes like an enemy and to spark a public campaign to help defeat it, with bumper stickers and lapel pins.
The President decided to introduce his new economic proposal to the public in a televised address to Congress in early October 1974. The speech urged Americans to make up "a list of ten ways to fight inflation and save energy." But to deliver a speech
that sought to address a severe economic downturn with gimmicky catchphrases and buttons was not, in my view, presidential.
The response to the speech was not what Ford had hoped. Wearing a pin to defeat inflation became a national punch line.
Source: Known and Unknown, by Donald Rumsfeld, p.182-183
, Feb 8, 2011
Tax cuts are the best way to stimulate the economy
The best way to get jobs is to expand the private sector. We can do that by reducing Federal taxes as I proposed a year ago when I called for a tax reduction of $28 billion--three-quarters of it to go to private taxpayers and
one-quarter to the business sector. We could add to jobs in the major metropolitan areas by a proposal that I recommended that would give tax incentives to business to move into the inner city.
Source: The First Carter-Ford Presidential Debate
, Sep 23, 1976
Balance government & individual; cut government growth to 5%
Government thought it could transform the country through massive national programs, but often the programs did not work. Too often they only made things worse. In our rush to accomplish great deeds quickly, we trampled on sound principles of restraint
and endangered the rights of individuals. We unbalanced our economic system by the huge and unprecedented growth of federal expenditures and borrowing. And we were not totally honest with ourselves about how much these programs would cost and how we
would pay for them.
The time has come for a fundamentally different approach--for a new realism. We must introduce a new balance to our economy--a balance that favors not only sound, active government but also a much more vigorous, healthy economy
that can create new jobs and hold down prices. We must introduce a new balance in the relationship between the individuals and the government-a balance that favors greater individual freedom and self-reliance.
Source: A Time To Heal, by Gerald Ford, p.350-351
, Jan 19, 1976
Ford to New York City: Drop Dead
In a speech at the National Press Club, I discussed New York City's problems:
"One week ago, NYC tottered on the brink of financial default. I can tell you now that I am prepared to veto any bill that has as a purpose a federal bailout of NYC to
prevent a default. By giving a federal guarantee, we would be reducing rather than increasing the prospect that the city's budget will ever be balanced. Such a step would be a terrible precedent for the rest of the nation. None of us should now derive
comfort from NYC's anguish. But neither can we let that contagion spread."
This approach, I thought, might shock New York's officials into coming to grips with their plight. And what was the result? A New York Daily News headline that read: "Ford to
City: Drop Dead."
As a result of my tough stand, NYC officials finally adopted budget cuts and a financial plan that would prevent default. We lent funds to the city when its cash flow was down, at an interest rate 1% higher than the prevailing rate.
Source: A Time To Heal: The Autobiography of Gerald Ford p.318-9&331
, Oct 29, 1975
Federal "vision" means big spending
[My presidential goals]: less government intervention in the affairs of citizens and corporations, greater reliance on individual initiative and free market economy, and increased local responsibility for overcoming adversities. None of these goals
sounded particularly dramatic, of course, and that's why some people had difficulty responding to them. Political pundits in the nation's capital said that my ideas were stale and that I lacked "vision" as a President. Ever since FDR, that word "vision"
has been equated by the media with new federal attempts to solve new problems. The more costly these attempts, the more "vision" their backers possess-and never mind that these "visionaries" are spending money that doesn't belong to them.
But I have always felt that the real purpose of government is to enhance the lives of people and that a leader can best do that be restraining government in most cases instead of enlarging it at every opportunity.
Source: A Time To Heal, by Gerald Ford, p.263-264
, Apr 15, 1975
Long-term recovery at the cost of short-term suffering
I prepared my State of the Union address. 26 years before, as a freshman Congressman, I had stood in the rear of the House chamber and listened to President Truman report that "that the state of the Unions is good." I told [my speechwriter] I wanted to
say just the opposite. The state of the Union was NOT good, and any attempt to gloss over the problems all of us faced would have destroyed my credibility. Additionally, I said to insert a line saying that I didn't expect much, if any, applause.
Ever since Roosevelt, I knew, American Presidents had responded to economic challenges by trying to come up with crash programs that carried short-term benefits.
My programs were designed to foster a long-term recovery even at the cost of short-term suffering. Such proposals aren't likely to elicit cheers.
Source: A Time To Heal, by Gerald Ford, p.232
, Jan 15, 1975
Moratorium on federal spending, to fight recession
I decided to recommend a $16 billion tax cut: $12 billion would go to individuals as a rebate of u to $1,000 per person, and the remaining $4 billion would reward industries that decided to expand & thus create more jobs. That would counter the recession
by increasing the amount of money consumers had to spend.
Next I was going to propose a 1-year moratorium on all new federal spending programs with the exception of crucial defense and energy-producing measures. I would veto everything else. I would
recommend a limit of 5% on federal pay increases in 1975, and I would propose the same ceiling apply to automatic cost-of-living increases that are tacked onto social security payments as well as government and military retirement checks.
I was well
aware that this plan contained risks. My proposed tax cut would raise the budget deficit so high that instead of restoring the public's confidence in the economy, it might frighten people out of their wits & could spur a new round of inflation.
Source: A Time To Heal: The Autobiography of Gerald Ford, p.230-231
, Jan 13, 1975
Whip Inflation Now: voluntary participation in WIN campaign
Almost everyone who had participated in the economic summit conference agreed that inflation was public enemy number one and that our paramount objective was to whip it. The best way to implement a voluntary citizens' program to combat inflation, my
staff reasoned, was to have a campaign with a symbol. The name of that campaign should be Whip Inflation Now and the symbol a button marked with the letter WIN. Once you had 213 million
Americans recognizing that inflation was a problem and joining in the effort to do something about it, positive results would have to follow. If both the government and the people tightened their belts voluntarily and spent
less than they had before, that would reduce demand, and the inflation rate would start going down. Some of my economic advisers were skeptical about the program, but most agreed, WIN was worth a try.
Source: A Time To Heal, by Gerald Ford, p.193-194
, Oct 8, 1974
Fight economic crises by projecting a steady hand
[In 1975], inflation was galloping ahead at an annual rate of more than 12%. Wholesale prices had spurted up 20.4% in the last year alone. The US trade deficit in August had hit a record $1.1 billion.
The reasons we were in this terrible position were
fairly clear. One was LBJ's attempt to provide guns and butter simultaneously in the mid sixties. A second reason was Nixon's decision to adopt wage and price controls in 1971. The third reason was the staggering increase in energy costs that followed
the 1973 Yom Kippur War. The final factor was the rise in the cost of food: drought had scorched the Midwest in 1974.
Some people believe that all a President has to do to end inflation is to flick a switch. The reality is you
must have a sound economic plan--and the guts to stick with it. We tried to show leadership by projecting a clam and steady hand. Some people misinterpreted this by concluding we were stodgy and unimaginative, but that didn't bother me.
Source: A Time To Heal: The Autobiography of Gerald Ford, p.151-152
, Aug 25, 1974
Page last updated: Jul 11, 2013