Politics of prosperity: The Kennedy presidency and economic policy

A political history of domestic economic policy during the presidency of John F. Kennedy, this dissertation examines his administration's defeats and successes as it sought to achieve steady economic growth with price stability. Dissatisfied with the sluggish growth and recurrent recess ions of the late 1940s and 1950s, liberal economists believed that the nation's relative prosperity should provide the basis for achieving still greater wealth. Many conservatives, however, thought it made no sense to alter a system that obviously worked. Both the desire for change and the fear of it were rooted in American prosperity.;The dissertation analyzes not only how the administration confronted these political constraints to growth, but how it dealt with the problems that arose when it found two mutually desirable goals impossible to achieve simultaneously. In particular, it examines the limits that were placed on pursuing economic stimulus by the need to improve a worsening balance of payments deficit in a changed international economic environment.;The dissertation examines the political histories of the era's spending, monetary, incomes, and tax policies, as well as the administration's approach to the balance of payments problem. Among the programs discussed are the 1961 anti-recession plan, the investment tax credit, the Trade Expansion Act, the shift in monetary policy known as Operation Twist, and the Kennedy wage-price guideposts. The dissertation ends with a discussion of the politics of the 1964 Revenue Act, the first major tax cut meant to engender the steady growth of an already expanding economy.;Although the use of governmental policy to effect changes in the economy had been accepted since the New Deal, taking deliberate steps to maintain prosperity had not. Rather, mainstream views of economic policy in the late 1940s and 1950s held that government should act only to correct an extant downturn, not to prevent one. Hence, the members of the Kennedy administration found that they had to overcome a reluctance on the part of many Americans, especially in the business and financial communities, to the active pursuit of stimulus when there was not a recession.