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NIXONOMICS the Economy Under Attack NIXONOMICS The Economy Under Attack Gary Allen, a graduate of Stanford Uni­ every day President Johnson put off the versity and one of the nation's top necessary reduction in federal spending authorities on civil turmoil and the New "he places in greaterjeopardy the entire in­ Left, is author of Communist Revolution ternational monetary structure." Broad­ In The Streets, and of the explosive best­ casting over C.B.S, radio on April 25, seller, Richard Nixon: The Man Behind 1968 , Mr. Nixon claimed that "only by The Mask, just released by Western cutting the federal budget can we avert an Islands. Mr. Allen, a former instructor of economic disaster .. .." In Dallas on Octo­ both history and English, is active in ber 11, 1968 , he declared that "America anti-Communist and other humanitarian cannot afford four years of Hubert Hum­ causes. Now a film writer, author, and phrey in the White House," because Hum­ journalist, he is a Contributing Editor phrey pushed for programs which would to AMERICAN OPINION. Gary Allen is have caused "a spending spree that would also nationally celebrated as a lecturer. have bankrupted this nation." A related theme of the Nixon cam­ • THE term "Nixonornics" was coined by paign was that the taxpayers' money was Democrat National Chairman Larry O'Bri­ being thrown down every socialist rathole en during the 1970 Congressional cam­ imaginable. In his acceptance speech at paign. O'Brien, as witty as he is Irish, ob­ the Republican National Convention, the served that under "Nixonomics" things inspired Candidate Nixon declared: "It is that are supposed to go up (like the stock time to quit pouring billions of dollars market and productivity) tend to go down, into programs that have failed. We are on and things that are supposed to go down the wrong road - it is time to take a new (like prices and unemployment) tend to road . ..." In a formal position paper on rise. It may seem hypocritical for one so in­ the economy, he proclaimed: timately connected with the Kennedy and Johnson Administrations to raise the mat ­ The entire budget needs exhaus­ ter of mishandling of the economy, but tive review .... Some programs such things are to be expected in partisan . .. must accept less than maxi­ politics. What is surprising is that there is mum funding; 'non-essentials ... an uncomfortable amount of truth in must await easier times; every ma­ O'Brien's epigram. jor program . .. must be scoured The story of "Nixonomics" did not for economies. begin with the establishment of the Nix­ on Economic Policy on August 15, 1971, Such promises seemed a lifesaver to mil­ but goes back to the 1968 campaign in lions of Americans awash to their ears in which Mr. Nixon again and again attacked the taxes required to float the Great Socie­ the profligate spending ofthe Johnson Ad­ ty. These millions believed Richard Nixon ministration . Candidate Nixon forecast ec­ . meant what he said. They had faith in his onomic ruin if government spending were personal integrity. And they elected him not slashed to the marrow, He claimed that President of the United States. NOVEMBER, 1971 49 Once secure in the White House, how­ billion. Before the year was out, the ever, President Nixon was beset by a most "bare bones" had been fleshed out to amazing lapse of memory. According to $200 billion .What had been deno unced columnist Charles Bartlett , the New Fron­ as profligate spending under L.B.J. was tier and Great Societ y had expanded the now said to be tightfisted frugality. number of domestic spending programs The following year , fiscal 197I , Mr. from 40 to an astounding 473. Republi­ Nixon introduced a $202 billion Budget, cans had resisted the addition of every and beefed it up to a fantastic $210 one of those 433 welfare schemes. Yet , billion before the end of the year. Then , soon after the election, word was leaked for fiscal 1972, he announced his conver­ from the Nixon headquarters that the sion to the fiscal philosophy of the Great Society, the much-denounced War Fabian Socialist John Maynard Keynes on Poverty and all, was to be preserved. and the federal Budget flitted skyward to " Liberal" columnist Roscoe Drummond an unbelievable $230 billion. For fiscal announced with delight : 1973, estimates indicate a Nixon Budget of from $250 to $275 billion . The most significant political To put this horror story in some kind fact of the hour is now so evident it of perspective it should be remembere d can't be seriously disputed: tha t President Harry Truman, who inher­ President Richard M. Nixon is a ited all of the New Deal programs and the "secret liberal. " serious problems of post-War adjustment, . .. Nixon is already proving spent only $65 billion during his last year himself a liberal-in-action if not a in office. Nine years later, Dwight Eisen­ liberal-in-theory - and this is what hower's 1960 Budget was but $76 billion. counts. The President's current $230 billion ex­ The evidence: travaganza is even $80 billion more than Lyndon Johnson initiated and Mr. Nixon claimed L.B.J . should have Congress approved the largest vol­ been spending in 1967. ume of social legislation of any A billion dollars amounts to approxi­ president in history, A nd Nixon mately five dollars for every man , worn­ prepares to carry forward every an, and child in th e United States. This major Johnson measure. year's share of the federal Budget for a Nixon is not proposing to dis­ typical family of fou r is $4,600. The mantle them. He is proposing to largest portion of that comes from "hid­ build on them and his goal is to den taxes" paid by corp orati ons and make sure they achieve their pur­ businesses, which are in turn passed on to pose more effectively. the consum er in the price he pays for goods and services. Under "Nixonornics" Lyndon Johnson's 1967 Budget - at federal spending has increased a stagger­ the height of the Vietnam War - was a ing $47 billion during the first three years bloated $ 158 billion , which at the time of the Nixon Administration, with the seemed astronomical. While on the pri­ result that an American family of four is mary trail, Mr. Nixon had claimed that if paying $940 a year more in direct and that amount were not sliced by $ 10 indirect taxes than it did under the billion, the country would face fiscal profligate Lyndon Johnson . When it disaster. In 1968 , Johnson fatt ened th e comes to spending the publi c's money, Budget to a staggering $183 billion. For Mr. Nixon makes L.B.J . look like the fiscal 1969, however, Richard Nixon in­ Piker of th e Pedernales. And if President troduced what was astonishingly de­ Nixon's 1973 reelection Budget can be scribed as a "bare bones" Budget of $192 held to $250 billion , which is unlikely, it 50 AMERICAN OPINION Inflation is caused by the government inflating the money supply with defi­ cit-backed paper dollars, driving up prices and forcing demands for wage increases. When money must be backed by gold, such inflation cannot occur. But our gold supply has been poured into the hands of internation­ al bankers. We have so little left that it has been necessary to admit bank­ ruptcy and suspend international convertibility of the American dollar to gold. At the root of these disasters - a repudiated dollar and exploding inflation - are the Nixon deficits. In three years, Mr. Nixon made the profligate Lyndon Johnson look like the Pinchpenny of the Pedernales by "LOOKS LIKE ACINCH" running up deficits totaling a stupen­ dous $66.7 billion. Interest on the national debt, now $21.2 billion a year and the third-largest Budget ex­ penditure, is rocketing out of sight even as deficit spending is used to destroy our money by inflation. Mr. Nixon has responded by a dictatorial " temporary" freeze on our wages and prices, but goes on spending wild­ ly. In the last three years Nixonom­ ics has cost the ave rage family of four some $8,620. If Richard Nixon is allowed to continue h is attack on the economy, it could cost every­ thing we have - including our liberty. NOVEMBER, 1971 51 will still cost our typical family an extra pay during the past few years to offset at $400 - for a total added cost of the least partially the terrible increase in the vaunted "Nixonomics" amounting to cost of living. But , in most cases, Ameri­ $1,340. By 1972, Nixon will have raised cans are running on a treadmill. U.S. the cost of running the federal govern­ News & World R eport for May 17, 1971, ment by thirty percent. provides some figures: But remember, we could not have afforded four years of Hubert Humphrey. Consider what has happened to Unfortunately, that added $1,340 is the typical worker in industry: Be­ not all that "Nixonomics" has cost the tween 1965 and early 1971, his average family. As government spending pay, on average, rose from $95 a has ballooned, so has the cost of living. week to $124, a gain of $29. But During the initial three years of the inflation trimmed that increase to Nixon Administration the cost of living $2.72 in "real" buying power. has jumped approximately eighteen per­ Employers have been caught in cent. This is sometimes called the "infla­ the same sort of squeeze. Soaring tion tax," once described by Richard costs - and sluggish sales in the Nixon as the "cruelest tax of all." If our past couple of years - have average family breadwinner is earning chopp ed profit marginsto the lowest $10 ,000 a year, his inflation tax is $600 level since World War II.
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