Radio Address to the Nation on the Economy
June 23, 1984 My fellow Americans:
This week, we had some more good economic news. The economy grew by a revised 9.7 percent in real terms for the first quarter and an estimated 5.7 percent for this quarter. Both figures are better than had been predicted.
The strength of our expansion continues to surprise experts and outperform past recoveries. The curious thing is that some experts treat this good news -- strong economic growth -- as a cause for worry. Well, the commonsense reaction is right. Good news is not bad, it's good.
In some key ways this expansion is both different and more durable than those in the past. Stronger growth has enabled more people to find work and bring home paychecks, and it's improved the job outlook for the future. More people are working in America today than ever before. And the United States is creating more jobs at a faster rate than any other major industrialized country in the world, well over 6 million jobs in the last 18 months. In fact, we created more jobs in the month of May alone than all the Common Market countries created in the last 10 years.
I remember back in 1983 when a bill was introduced in Congress aimed at creating 300,000 jobs a year by spending $3\1/2\ billion of your tax money. Now, I said, ``No, the private economy will do the job better.'' And it has done better, much better. Since the recovery began, our economy has been creating, on average, more jobs every month than that government program promised to create in 12 months. And the jobs are benefiting everyone. Nearly 3 million women, a million blacks, and 650,000 Hispanics have found new jobs.
Recently, the National Federation of Independent Business said that among its small business membership, the percentage planning to hire new workers is the highest in 4 years. Since most new jobs are created by firms with a hundred employees or less, that small business survey bodes well for continued job gains in the future. So, economic growth is stronger than before, stronger than anyone expected, and jobs are being created at record rates.
But something else makes this expansion different. Inflation is staying down, and we mean to keep it down. It was up only two-tenths of 1 percent in May and only 4.2 percent over the last 12 months, barely a third of 1980's 12.4-percent rate. We've reduced inflationary pressures by reducing government spending growth, by promoting greater production through lower tax rates, and by spurring greater competition through the deregulation of key industries. Nor do we see signs that runaway price increases will reappear. This is the first time since the 1960's that we'll be able to enjoy strong and steady growth without high inflation.
Another characteristic of this expansion gives it extra power while helping us fight inflation. Investment by U.S. businesses in new plants and equipment, so crucial to helping workers be more productive and to helping our industries better compete in world markets, has been rising at the fastest rate since 1949. We're witnessing an historic surge of innovation, risk taking, technological development, and productivity growth. American economic leadership is back.
Now the question is why, and why here in America to a greater degree than anywhere else? Well, America began a fundamental change in direction in 1981; a change from a policy of government promises, a change from taxing you more no matter how hard you tried, to rewarding you for working harder and producing more than before. Personal incentives are changing America, restoring our spirit, strengthening our economy, giving us the opportunity and confidence to shape our future and make it work for us.
And that's why I'm determined to finish the job we've begun by simplifying our tax system and broadening the base so we can bring personal income tax rates down further. If we can do that while keeping Federal spending under control, there'll be no stopping the United States.
We all have a job to do to protect this expansion and keep the lid on inflation, which is the best guarantee against rising interest rates. The Congress must cooperate and restrain spending by passing the downpayment deficit reduction package. The Federal Reserve must assure enough liquidity to finance the expansion without raising expectations of new inflation. And we must all work to make government live within its means.
If we meet these responsibilities, today's good news will be here to stay, and America's best days will lie ahead.
Until next week, thanks for listening. God bless you.
Note: The President spoke at 12:06 p.m. from Camp David, MD.