A
blocked Truman’s Fair Deal, and he showed little skill in pushing
his domestic reform measures through Congress. Since Kennedy
had been elected by the slimmest of margins, he lacked a popular
mandate—a clear indication that voters approved of his plans.
As a result, he often tried to play it safe politically. Nevertheless,
Kennedy did persuade Congress to enact measures to boost the
economy, build the national defense, provide international aid,
and fund a massive space program.
STIMULATING THE ECONOMY
One domestic problem the
Kennedy team tackled was the economy. By 1960 America was
in a recession. Unemployment hovered around 6 percent, one
of the highest levels since World War II. During the campaign,
Kennedy had criticized the Eisenhower administration for fail-
ing to stimulate growth. The American economy, he said,
was lagging behind those of other Western democracies and
the Soviet Union.
Kennedy’s advisers pushed for the use of deficit spend-
ing, which had been the basis for Roosevelt’s New Deal. They
said that stimulating economic growth depended on increased
government spending and lower taxes, even if it meant that
the government spent more than it took in.
Accordingly, the proposals Kennedy sent to Congress in
1961 called for increased spending. The Department of
Defense received a nearly 20 percent budget increase for new
nuclear missiles, nuclear submarines, and an expansion of the
armed services. Congress also approved a package that
increased the minimum wage to $1.25 an hour, extended
unemployment insurance, and provided assistance to cities
with high unemployment.
ADDRESSING POVERTY ABROAD
One of the first campaign promises
Kennedy fulfilled was the creation of the Peace Corps, a program of volunteer
assistance to the developing nations of Asia, Africa, and Latin America. Critics in
the United States called the program “Kennedy’s Kiddie Korps” because many vol-
unteers were just out of college. Some foreign observers questioned whether
Americans could understand
other cultures.
Despite these reservations,
the Peace Corps became a huge
success. People of all ages and
backgrounds signed up to work
as agricultural advisers, teach-
ers, or health aides or to do
whatever work the host coun-
try needed. By 1968, more
than 35,000 volunteers had
served in 60 nations around
the world.
A second foreign aid
program, the Alliance for
Progress, offered economic
and technical assistance to
Latin American countries.
Between 1961 and 1969, the
United States invested almost
886 C
HAPTER 28
WHAT IS A RECESSION?
A recession is, in a general sense,
a moderate slowdown of the econ-
omy marked by increased unem-
ployment and reduced personal
consumption. In 1961, the
nation's jobless rate climbed from
just under 6 percent to nearly 7
percent. Personal consumption of
several major items declined that
year, as people worried about job
security and spent less money.
Car sales, for example, dropped
by more than $1 billion from the
previous year, while fewer people
took overseas vacations. Perhaps
the surest sign that the country
had entered a recession was the
admission by government officials
of how bleak things were. “We are
in a full-fledged recession,” Labor
Secretary Arthur Goldberg
declared in February of 1961.
(See recession on page R44 in
the Economics Handbook.)
A Peace Corps
volunteer gives a
ride to a Nigerian
girl.
Background
See deficit
spending on page
R39 in the
Economics
Handbook.
MAIN IDEA
MAIN IDEA
A
Identifying
Problems
Why did
Kennedy have
difficulty achieving
many of his New
Frontier goals?
A. Answer
He lacked the
votes in
Congress and a
popular mandate.
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