Initial Reaction to Nixon's Economic Plan - Plain Truth Staff - September 1971

Plain Truth Staff

President Nixon's August 15th announcement included what may have been the most dramatic economic package since Franklin Delano Roosevelt's New Deal in 1933. In the general order of importance, the President : Cut the dollar loose from gold, inviting foreign banks, governments, and private markets to "float" the dollar's value. - Imposed an immediate 90-day freeze on all wages, prices, and rents. - Imposed a 10% surcharge on all imports. Cut almost $5 billion in Federal spending for Fiscal 1972, including 1) postponing revenue sharing to cities for three months, 2) postponing welfare reform for another year, 3) reducing Federal jobs by 130,000 (mainly through attrition) and postponing governmental pay raises 6 months. These proclamations took immediate effect. It is the prerogative of the Chief Executive to institute such measures under "emergency" situations. In addition, the President asked Congress for swift action on the following measures: Increasing investment tax credit from 7% to 10%. Repealing the 7 % excise tax (about $200 per car) on autos. Advancing income tax benefits to begin January 1, 1972, instead of 1973. Within days, foreign and domestic officials responded; - Information Supplied By: Herbert W Armstrong Library