An examination of public attitude toward fiscal aspects of Keynesian economic policy expressed in the Revenue Acts of 1962 and 1964
The Revenue Acts of 1962. and particularly 1964 signaled to many historians and economists alike the genesis of a public acceptance of Keynesian economics. No longer would the public expect the Federal Government to remain inert during the vacillations of the business cycle but would instead anticip...
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2011
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| Online Access: | http://cardinalscholar.bsu.edu/handle/handle/177901 http://liblink.bsu.edu/uhtbin/catkey/414096 |
| Summary: | The Revenue Acts of 1962. and particularly 1964 signaled to many historians and economists alike the genesis of a public acceptance of Keynesian economics. No longer would the public expect the Federal Government to remain inert during the vacillations of the business cycle but would instead anticipate the use of the Government's taxing and expenditure powers to assure economic growth, stable prices, and full employment. To many, this change in public attitude represented a radical departure from American tradition. Jim Heath cites James Tobin, one of the President's economic advisors, as suggesting that the "transformation of thinking by men of affairs--businessmen, bankers, congressmen, financial journalists, editorial writers—[was] nothing less than a revolution."1 The purpose of this paper is to examine the statements and public attitudes of these "men of affairs" in order to determine how they were "transformed" and more importantly, how they in turn attempted to "revolutionize" public attitudes toward Keynesian economics. The study concentrates specifically on public opinion about deficit spending.This paper additionally examines the role of President Kennedy and the Council of Economic Advisors in instigating public "acceptance" of "Keynesian" policies. The study explores the attempts to popularize and sell a relatively sophisticated economic ideology to the public. Traditional sources have suggested that the Administration instigated and facilitated public acceptance of Keynesian policies. For instance, economist Seymour Harris suggests thatThe major credit . . . for the increasing acceptance of modern economics belongs to President Kennedy. He had become the most literate of all Presidents in his understanding of modern economics and revealed .1 James Tobin, "The Intellectual Revolution in United States Economic Policy Planning" (unpublished lecture, University of Essex, England, January 18, 1966), as cited in Jim Heath, John F. Kennedy and the Business Community (Chicago: University of Chicago Press, 1969), p. 38. great courage in his willingness to risk political losses in putting his economics to the test of the market place. 2 The conclusions of this work, however, disagree with these contentions. While maintaining that the Executive Branch may have had a hand in "popularizing" certain stimulative fiscal policies to facilitate economic growth, this study finds little justification for the conclusion that the Administration actually added to "increasing acceptance of modern economics."This work explores the techniques utilized by various individuals interested in advancing the tax cuts. It also investigates appeals to the anti-deficit attitudes of the American public by individuals opposed to the tax program. In both instances, the study identifies certain common arguments utilized by both pro-and anti-tax cut forces. These arguments then become the basis for the study's analysis and conclusions. Throughout, special attention is paid to the role of public values in dictating the techniques most often employed by opposing aides during the tax cut. 2 Seymour Harris, "Economics of the Kennedy Years," in John F. Kennedy and the New Frontier, ed. By Aida DiPace Donald (New York: Hill and Wang, 1966), p. 86. discussions. The study finds that appeals to basic values are more persuasive in directing public attitudes than are attempts to reveal the economic analysis and theory behind the cuts. Therefore, in most instances, mass public economic education is usually discarded in favor of affective polemics directed toward gaining public support. An examination of the techniques used by various individuals in advancing their attitude toward the Federal debt is accomplished through an examination of "popular" sources, including periodicals, journals, and some government documents that reflected the Administration's position. Every attempt was made to include representative samples from both "liberal" and "fiscally conservative" sources. In order to provide some theoretical basis for evaluating the comments made by publicly visible individuals, the paper presents an abbreviated survey of both historical and analytical views of public debt. The major portion of the work consists of a chronological examination of the legislative progressions of the Tax Bills as they advanced through a myriad of obstacles on their way to becoming law. Conclusions are drawn both on the Administration's effectiveness in getting the Bills through the Congress as well as the mass "economic education" which supposedly occurred duringthe three years leading to the final passage of both tax cuts. |
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