Nixon alone in his EOB office on New Economic Policy

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To help them get on their feet, to protect their freedom, the United States provided 143 billion dollars for aid.

That was the right thing for our citizens.

Today, largely with our help, they have regained their vitality and have become our strong contenders.

Now that other nations are economically strong, the time has come for them to bear their fair share of the burden of independent freedom around the world.

The time has come for exchange rates to be set straight, for the major nations to refuse

There is no longer any need for the United States to compete with one hand tied behind your back.

The range of actions I have taken have imposed on us on the job front, the immigration front, the monetary front.

The most comprehensive economic policy we have undertaken by this nation in four decades.

We are fortunate to live in a nation with an economic system capable of producing for its people the highest standards of living in the world.

A system flexible enough to change its ways dramatically, accurately,

Circumstances call for change.

And most important, a system of resource organizing that gives prosperity, with freedom and opportunity, unmatched in the history of nations.

The actions I announce tonight are to lay the basis for renewed confidence, to make it possible for us to compete fairly with the rest of the world, to open the door to new prosperity.

A government with all its powers is not able to keep its successful peace.

That key, my fellow Americans, is in your hands.

A nation like a person has to have a certain inner drive in order to succeed.

In economic affairs, that inner drive is called a competitive spirit.

Every action I have taken on has been designed to nurture and stimulate that competitive spirit, to help us snap out of that self-doubt and self-dispair that saps our energy and erodes our confidence in ourselves.

Whether this nation stays number one in the world's economy or resigns itself to second, third, or fourth place, whether we as a people instill our faith in ourselves or lose our faith,

Whether we hold fast to the strength that makes peace and freedom possible in this world, or lose our grip, all that depends on your competitive strength, your sense of personal destiny, your pride in your country for some.

We can be certain of this.

As the threat of war recedes in the world, the challenge of peaceful competition in the world increases.

Not in peaceful competition, because America is aggravated and keeps coming on.

As there always have been in our history, there will be voices urging us to shrink from that challenge, to build a proud, a protecting wall around ourselves, to crawl into a shell as the rest of the world moves ahead.

200 years ago, a man wrote in his diary, many thinking people believe America has seen its best days.

That was in 1775, just before the American Revolution, the dawn of the most exciting era in the history of man.

Today, we hear the echoes of those voices preaching the gospel of gloom and defeat, saying the same thing we have seen on our best days.

I say, let Americans reply.

Our best days lie ahead.

As we move ahead into a generation of peace and we blaze the trail for a new prosperity, I say to every American, let us raise our spirits.

Let us raise our sights.

Let all of us contribute all we can to this great and good country that contributes so much to the progress of mankind.

Let us invest in our nation's future.

And let us revitalize that faith in ourselves that will build a great nation in the past and will shape the future of the world.

I have addressed the nation a number of times over the past few years in the province and in the war.

Because of the progress we have made for achieving that goal, this Sunday evening is the appropriate time for us to turn our attention to the challenges of peace.

America today has the best opportunity in this century to attain two of its greatest ideals, to bring about a full generation of peace, and to create a new prosperity without war.

This not only requires bold leadership, ready to take bold action.

It calls forth the greatness of a great people.

Prosperity without war requires action on three fronts.

We must create more and better jobs.

We must stop the rise in the cost of living.

We must protect the dollar from the attacks of the internationals on various backlands.

We are going to take that action, not timidly, not half-heartedly, and not in piecemeal fashion.

We are going to move forward to the new prosperity without war, and it's because of great people, all together, and along a broad front.

Time has come for a new economic policy for the United States.

Its targets are unemployment, inflation, and international speculation.

Here is how we're going to attack them.

First, on the subject of jobs.

We all know why we have an unemployment problem.

Two million workers have been released from the armed forces and defense plants because of our success in winding down the war in Vietnam.

Putting those people back to work is one of the challenges of peace.

We have begun to make progress.

Our employment rate today is below the average of the four peacetime years of the 1960s.

But we can and we must do that.

Time has come for American industry, which has provided more jobs and higher real wages than any other industrial nation in history, to embark on a bold program of new investment in production for peace.

To give that system a powerful new stimulus, I shall ask the Congress, when it reconvenes after its summer recess, to consider as its first priority the enactment of the Job Development Act of 1971.

I propose to provide the strongest short-term incentives in our history to invest in new machinery and equipment that will create new jobs for America.

A 10% job development credit for one year, expected as of today, with a 5% credit after August 15, 1972.

This tax credit for investing in new equipment will not only generate new jobs, it will raise productivity and make our goods more competitive in the years ahead.

I propose to repeal the 7% excise tax on automobile C-50 today.

This will mean a reduction in prices of about $200 per car.

I shall insist that the American auto industry pass this tax reduction on to its nearly 8 million customers who are buying automobiles this year.

Lower prices will mean that more people will be able to afford new cars, and every additional 100,000 cars sold will mean 25,000 new jobs.

Third, I propose to speed up the personal income tax exemption scheduled for January 1, 1973 to January 1, 1972, so that taxpayers can deduct an extra $50 for each exemption one year earlier than planned.

This increase in consumer spending power will provide a strong boost to the economy in general and to employment in particular.

Tax reductions, I recommend, together with the broad upturn of the economy which is taking place in the first half of this year, will move us strongly toward a goal this nation has not reached since 1956, prosperity with full employment in peacetime.

Looking to the future, I shall direct the Secretary of the Trade to recommend to the Congress in January new tax proposals for stimulating research and development of new industries and new technologies to help provide the 20 billion new jobs that America needs for the young people who will be coming to the job market in the next decade.

To offset the loss of revenue with these tax cuts, which directly stimulate new jobs, I have ordered a $4.7 billion cut in federal spending.

Tax cuts that stimulate employment must be matched by spending cuts to restrain inflation.

To check the rise in the cost of government, I have ordered postponement of pay raise and a 5% cut in government employment.

I have ordered a 10% coming foreign economic aid.

In addition, since the Congress has already laid action on two of the great initiatives in this administration, I will ask Congress to amend my proposal to postpone the implementation of revenue sharing for three months and welfare reform for one year.

In this way, I am reordering our budget priorities to concentrate more on achieving full employment.

The second indispensable element of the prosperity is to stop the rise in the cost of money.

One of the cruelest legacies of the artificial prosperity produced by war is inflation.

Inflation robs every American.

The $20 million we're retired for living on fixed incomes are particularly hard-earned.

Homemakers find it harder than ever to balance the family budget.

And the aid of the American laborers have been incredible.

For example, in the four war years between 1965 and 1969, your wage increases were completely not by price increases.

Your paychecks were higher, but you were no better off.

We have made progress against the rise in the cost of living.

From the high point of 6% a year in 1969, the rise in the prices has been cut to 4% in the first half of 1971.

And just as in our fight against unemployment, we can and must do better.

Time has come for decisive action to break the vicious circle of spiraling prices and costs.

I am ordering a freeze today.

I am ordering a freeze on all prices and wages throughout the United States for a period of 90 days.

In addition, I have called upon corporations to extend that wage price freeze to all Lebanon's.

I have today invited a cost-deflating council within the United States.

I have directed this council to work with leaders of labor and business to set up a proper mechanism for achieving continued price and wage stability after the 90-day freeze is over.

Let me emphasize two characteristics for this action.

First, it is temporary.

To put the strong, vigorous American economy into a permanent straitjacket would lock in on fairness and stifle the expansion of our free enterprise system.

Second, while the wage-price freeze will be backed by government sanctions if necessary, it will not be accompanied by the establishment of a new price-controlled bureaucracy.

I rely on the voluntary cooperation of all Americans, all of you, workers, employers, and so on, to make this breeze work.

Working together, we will break the back of inflation, and we will do it without the mandatory wage and price controls that crush economic and personal freedom.

The very expense of a problem and building the new prosperity is closely related to creating new jobs and fighting inflation.

We must protect the position of the American dollar as a pillar of monetary stability throughout the world.

In the past seven years, there's been an average of one international monetary crisis every year.

Who gains from these crises?

Not the working man, not the investor, not the real producer of wealth.

The gainers are the international money speculators.

Because they thrive on crises, they

Talk to me.

In recent weeks, the speculators have been waging an all-out war on the American dollar.

The strength of a nation's currency is based on the strength of that nation's economy, and the American economy is by far the strongest in the world.

Partly, I directed the Secretary of Trade to take the action necessary to defend their honor against speculators.

I direct the Secretary of Economy to suspend temporarily the convertibility of the dollar into gold or other reserve assets except in amounts and conditions determined to be in the interest of monetary stability and in the best interest of the United States.

Now what does this action mean for you?

Let me lay the rest above the loop of devaluation.

If you want to buy a foreign product or take a trip abroad, parking conditions may encourage your dollar to buy slightly less.

But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.

The effect of this action will be to stabilize the dollar.

This action will not win us any friends in the environment among the international money traders, but our principal concern is with the American workers and with their competition around the world.

To our friends abroad, including the many responsible members of the International Banking Bank,

For a day in the stability and flow of trade, I give this assurance.

The United States has always been and will continue to be a forward-looking and trustworthy trading partner.

In full cooperation with the International Monetary Fund and those who trade with us, we will press for the necessary reforms to set up an urgently needed new international monetary system.

Stability and equal treatment is in everybody's best interest.

I am determined that the American dollar must never again be a hostage in the hands of international speculators.

I am taking one further step in protecting the dollar to improve our thousand payments and to increase jobs for Americans.

As a temporary nation, I am today imposing an additional tax of 10% on goods imported to the United States.

This is a better solution for international trade and direct controls in the United States.

This import tax is a temporary action, not directed against many other actors, but an action that makes certain that American products will not be at a disadvantage because of unfair exchange rates.

When the unfair treatment is ended, the import tax will end as well.

As a result of these actions, the product of American labor will be more competitive, and the unfair exit some of our foreign competition has will be removed.

This is a major reason why our trade balance has eroded over the past 15 years.

At the end of World War II, the economies of the major industrial nations of Europe and Asia were shattered.

To help them get on their feet, to protect their freedom, the United States provided $143 billion in foreign aid.

Nixon alone in his EOB office on New Economic Policy

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Nixon Library Finding Aid

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Also recorded on August 15, 1971

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Nixon alone in his EOB office on New Economic Policy

AI Summary

Audio

NARA Description

Nixon Library Finding Aid

Transcript (AI-generated)

Also recorded on August 15, 1971

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