During the year ahead the Government will be called upon to act in many important fields of economic policy from taxation and foreign trade to social security and housing.  In every case there will be alternatives.  We must choose the alternatives which will best measure up to our need for maintaining production and employment in the future.  We must never lose sight of our long-term objectives:  the broadening of markets—­the maintenance of steadily rising demand.  This demand can come from only three sources:  consumers, businesses, or government.

In this country the job of production and distribution is in the hands of businessmen, farmers, workers, and professional people-in the hands of our citizens.  We want to keep it that way.  However, it is the Government’s responsibility to help business, labor, and farmers do their jobs.

There is no question in my mind that the Government, acting on behalf of all the people, must assume the ultimate responsibility for the economic health of the Nation.  There is no other agency that can.  No other organization has the scope or the authority, nor is any other agency accountable, to all the people.  This does not mean that the Government has the sole responsibility, nor that it can do the job alone, nor that it can do the job directly.

All of the policies of the Federal Government must be geared to the objective of sustained full production and full employment-to raise consumer purchasing power and to encourage business investment.  The programs we adopt this year and from now on will determine our ability to achieve our objectives.  We must continue to pay particular attention to our fiscal, monetary, and tax policy, programs to aid business—­especially small business—­and transportation, labor-management relations and wage-price policy, social security and health, education, the farm program, public works, housing and resource development, and economic foreign policy.

For example, the kinds of tax measures we have at different times—­whether we raise our revenue in a way to encourage consumer spending and business investment or to discourage it—­have a vital bearing on this question.  It is affected also by regulations on consumer credit and by the money market, which is strongly influenced by the rate of interest on Government securities.  It is affected by almost every step we take.

In short, the way we handle the proper functions of government, the way we time the exercise of our traditional and legitimate governmental functions, has a vital bearing on the economic health of the Nation.

These policies are discussed in greater detail in the accompanying Fifth Quarterly Report of the Director of War Mobilization and Reconversion.

3.  Legislation heretofore recommended

AND STILL PENDING

To attain some of these objectives and to meet the other needs of the United States in the reconversion and postwar period, I have from time to time made various recommendations to the Congress.