Although intermittent declines in economic activity persist as a problem in our enterprise system, recent downturns have been moderate and of short duration.  There is, however, little room for complacency.  Currently our economy is operating at high levels, but unemployment rates are higher than any of us would like, and chronic pockets of high unemployment persist.  Clearly, continued sound and broadly shared economic growth remains a major national objective toward which we must strive through joint private and public efforts.

If government continues to work to assure every American the fullest opportunity to develop and utilize his ability and talent, it will be performing one of its most vital functions, that of advancing the welfare and protecting the dignity, rights, and freedom of all Americans.

GOVERNMENT FINANCE AND ADMINISTRATION

In January 1953, the consumer’s dollar was worth only 52 cents in terms of the food, clothing, shelter and other items it would buy compared to 1939.  Today, the inflationary spiral which had raised the cost of living by 36 percent between 1946 and 1952 has all but ceased and the value of the dollar virtually stabilized.

In 1954 we had the largest tax cut in history, amounting to $7.4 billion annually, of which over 62 percent went to individuals mostly in the small income brackets.

This Administration has directed constant efforts toward fiscal responsibility.  Balanced budgets have been sought when the economy was advancing, and a rigorous evaluation of spending programs has been maintained at all times.  Resort to deficit financing in prosperous times could easily erode international confidence in the dollar and contribute to inflation at home.  In this belief, I shall submit a balanced budget for fiscal 1962 to the Congress next week.

There has been a firm policy of reducing government competition with private enterprise.  This has resulted in the discontinuance of some 2,000 commercial industrial installations and in addition the curtailment of approximately 550 industrial installations operated directly by government agencies.

Also an aggressive surplus disposal program has been carried on to Identify and dispose of unneeded government-owned real property.  This has resulted in the addition of a substantial number of valuable properties to local tax rolls, and a significant monetary return to the government.

Earnest and persistent attempts have been made to strengthen the position of State and local governments and thereby to stop the dangerous drift toward centralization of governmental power in Washington.

Significant strides have been made in increasing the effectiveness of government.  Important new agencies have been established, such as the Department of Health, Education, and Welfare, the Federal Aviation Agency, and the National Aeronautics and Space Administration.  The Council of Economic Advisers was reconstituted.