In 1960s, the 36th President of the United States, Johnson, put forward the domestic program of building a "great society", the core of which was to protect civil rights and declare war on poverty. It promised the American people a grand goal-that is, to eliminate poverty and achieve racial equality through social changes. It has expanded the responsibility of the government, especially the federal government, to social welfare, and the scope and objects of welfare are wider than before, mainly manifested in the promulgation of a series of laws, the establishment of mechanisms and the implementation of policies on employment, medical care, education, life and housing, urban development and so on. [2]
At that time, the American economic cycle was in the stage of economic expansion, and the federal fiscal revenue grew rapidly. However, the state and local governments are facing the shortage of technical and financial resources, so Johnson decided to transfer federal resources to the state and local governments through the authorization plan. Because the American people showed unprecedented sympathy for the untimely death of President Kennedy, the American government and Congress reached a rare high degree of agreement, and a series of related bills were quickly passed. During the Johnson period, the United States formulated and implemented nearly 500 plans to increase social welfare expenditure.
However, it is under this prosperity that the national strength of the United States is quietly declining. The most important factor is the deterioration of efficiency: productivity has changed from rising to falling. At the same time, the level of wages and benefits is constantly improving, so that the unit labor cost increased by 4% in 1968, and by 6% in 1969 ~ 1970. After 1970, the wage increase exceeded the increase of labor productivity. At the same time, the escalation of the Vietnam War and the construction of a "great society" led to a sharp increase in social expenditure, which made the government's fiscal deficit reach a record $25.2 billion in 19765438, and it was still as high as $23.2 billion by the end of the fiscal year in the United States. 1969 ~ 1970 After the economic crisis, the U.S. government adopted an expansionary macro policy on 1970 to stimulate economic recovery. 197 1 Although the economy has recovered, the unemployment rate is still as high as 6% and the inflation rate has reached 4.5%.
Due to the deterioration of the domestic economic situation in the United States, the status of the dollar has also begun to waver. At the end of World War II, the United States was once the richest country, and its gold reserves accounted for more than 80% of the world's total at that time, so it was able to establish a fixed exchange rate system of $35 to an ounce of gold. Under the arrangement of the Bretton Woods Conference, the US dollar has become a "hard currency" circulating all over the world. However, in the 1960s, with the decline in the competitiveness of American products and the re-emergence of Germany, Japan and other countries, the trade surplus of the United States continued to decrease. By May of 197 1, the trade surplus disappeared, and the trade deficit appeared for the first time since 1893, and the deficit continued to expand. America's gold reserves are also declining. A large amount of dollars flowing into Europe began to depreciate and became an unpopular currency. The US government can no longer support the fixed exchange rate of US dollar/gold.
In this case, the Nixon administration once adopted a "double-edged sword" policy: on the one hand, the Federal Reserve implemented an expansionary monetary policy to stimulate the economy and reduce the unemployment rate. On the other hand, President Nixon unexpectedly announced the first phase of his "new economic policy" in August, 197 1: wage price control will be implemented for three months, and gold will be stopped to pay dollars. This move, known as "Nixon shock", deeply shocked American citizens who have always lived in a free market economy; At the same time, the Bretton Woods international monetary system established in the early postwar period collapsed, and the western economy lost its stable international economic environment.
197 1 10 In June, Nixon made another speech to the whole country and began the second stage of the "new economic policy". This time, the opposition began to become strong. Moreover, it was soon discovered that the wage committees and price committees set up to implement wage and price control actually didn't work at all. Fearing that the trade union might withdraw its representative from the supervisory body, the Wage Committee repeatedly made concessions: first, it announced that it recognized the delayed wage increase and set the standard line of annual wage increase at 5.5%, and then agreed to the wage increase of coal miners 15%. The price Committee can't help either. At the beginning, the price increase of tinplate produced by two steel enterprises was approved. In less than three weeks, among the 500 largest companies in China, 1/3 applied for price increase, with a ratio of 20: 1. Results During the period of 1972, the price still rose by 3.2% and the unemployment rate remained at 5%.
1In the spring of 973, Nixon, who was troubled by soaring food prices and Watergate, imposed a price freeze again in June. The result was disastrous: there was no trace of beef in the market and the food shelves were empty. For the first time, Americans were in short supply in peacetime. Only one month after implementation, the freeze began to thaw. At this time, the US government turned to fiscal and monetary policies to control prices. Nevertheless, from the third quarter of 1973 to the third quarter of 1974, the prices of daily necessities such as grain, oil and fish meal soared. During the oil crisis, the price of oil rose from $3 per barrel to $65,438+02, a fourfold increase. 1April 30, 974, the wage and price control will be cancelled automatically when it expires. Coupled with the depreciation of the US dollar and other factors, the price soared, and the annual 1974 reached a record high of 12%.
By the time Ford became president of the United States in August, 1974, the "stagflation" situation had been formed. At the beginning of his administration, President Ford declared that inflation was America's number one enemy. At that time, Ford and its economists didn't expect the unemployment rate to rise to 9% in nine months, which became big news at 1975. The recession of 1974 ~ 1975 made the Ford government change its original intention. Under the pressure of Congress, the Federal Reserve began to loosen monetary policy at the beginning of 1975. Before Ford left office, the macroeconomic policy of the United States was always tight before it was loose, and the economy was always characterized by high unemployment and high inflation.
In order to reduce the unemployment rate, the Carter administration began to implement fiscal and monetary policies to stimulate economic growth after 1977 came to power. During the three years from 1977 to 1979, the growth of m 1 reached the post-war record. This led to the inflation rate of 1979 in the fourth quarter rising to 12.7%. From the fourth quarter 1976 to the fourth quarter 1979, while the prices of gold and oil rose rapidly, the dollar continued to depreciate; The productivity increased by 3. 1% and decreased by 2. 1%. The gnp growth rate dropped from 4.9% to 65,438+0.0%, but the unemployment rate remained high, ranging from 6% to 8%. In this way, the public lost confidence in the democratic government and the Fed's macroeconomic policies. This led to the coming to power of the Communist Party of China and the government, the re-formulation of macroeconomic policies, and the "reverse reform" of social welfare policies and government control policies.
Not only the United States, but also the whole western world began to fall into the quagmire of "stagflation" in the early 1970s. The average annual growth rate of gnp in the seven western developed countries is 2.4%, the unemployment rate is 5.3%, and the average annual growth rate of consumer price index is 9.4%. Prior to this, from 1968 to 1972, the average growth rate of the seven countries was 4.3%, the average unemployment rate was 3.2%, and the average price increase rate was 4.8%.
In fact, it is simply the contradiction between Keynesianism and American capitalist social system. You can refer to the Yuelu version of the textbook, a compulsory course in high school history II.
Bubble economy: the excessive growth of virtual capital and the continuous expansion of related transactions are increasingly divorced from the growth of physical capital and industrial sectors, the prices of financial securities and real estate soar, and speculative transactions are extremely active. Bubble economy lies in financial speculation, which leads to false prosperity of social economy, and finally the bubble will burst, leading to social shock and even economic collapse.