CONTENTS Page CHAPTER 1. OPPORTUNITY AND RESPONSIBILITY IN A FREE ECONOMY. CHAPTER 2. ECONOMIC GROWTH AND IMPROVEMENT, 1953–56. . . . 9 The Current Economic Situation..... CHAPTER 4. EXTENDING AND BROADENING ECONOMIC PROGRESS... Maintaining Sound Government Finances... Improving Private Financial Facilities and Promoting Thrift. APPENDICES Page A. SUMMARY OF RECOMMENDATIONS IN THE ECONOMIC REPORT OF 71 B. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE COUNCIL OF ECONOMIC ADVISERS DURING 1956.... 77 C. POPULATION CHANGES AND PROSPECTS.. 85 D. STATISTICAL TABLES RELATING TO THE DIFFUSION OF WELL- 99 E. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND 119 LIST OF TABLES AND CHARTS (Chapters 2 and 3 and Appendix C) Tables 1. Changes in Gross National Product and Its Major Components, 1954-56..... 20 2. Changes in Production, Employment, and Personal Income, 1954–56.... 3. United States Exports of Goods and Services, 1952-56. 4. Changes in Industrial Production, 1955-56. 5. Security Offerings, 1953-56... 2225 21 26 37 6. Changes in Commercial Bank Holdings of Loans and Investments, 1953-56.... 38 7. Consolidated Cash Statements of Federal and State and Local Governments, Calendar Years 1952-56.... C-1. Population Change, 1946-56.. C-2. Average Future Lifetime Expected at Birth, Selected Years, 1900-54.... C-3. Distribution of the Female Population Aged 14 and Over, by 90 C-4. Median Ages of the Population and the Labor Force, Selected 92 C-5. Enrollments in Elementary and Secondary Schools, Selected 93 94 C-7. Indicators of Extension of Public Elementary and Secondary 94 C-8. Projections of the Population of the United States in Selected Ages, 1955-75. 96 Charts 1. Economic Expansion, 1952–56.... 2. Change in Composition of Output, 1952 to 1956..... 5. Agricultural Production and Technology Since Prewar.. 6. CCC Operations and Agricultural Exports, 1950-57. Economic Adjustments, 1953–54. ... 7. 8. Economic Activity, 1954–56... 9. Employment and Income, 1955-56. 10. Farm Income and Price Developments, 1950-56. 11. Carry-Overs of Selected Crops, 1952-57. Page 5 7 9 10 13 14 16 23 27 29 12. Wholesale Prices, 1954-56. 31 33 13. Consumer Prices, 1954-56.. 14. Demand for Funds, 1954-56.. 15. Bank Loans, Investments, and Deposits, 1954-56. 16. Bond Yields and Interest Rates, 1953-56... 34 36 38 39 17. Federal Receipts and Expenditures, 1953-58. 18. Member Bank Reserves, 1954-56.. 41 43 C-1. Population and Projections to 1975.... 87 C-2. Births Through 1956 and the Number of 18-Year-Olds to 1974. 89 C-3. Population in Special Age Groups, 1930-75.. 91 93 TH Chapter 1 Opportunity and Responsibility HE ENORMOUS PRODUCTIVE POWER of the American economy was demonstrated again in 1956 when the Nation's output of goods and services reached $412 billion. This vast and increasing output provides the means for assuring our national security, supplying our present consumption needs, and building our capacity for future production. Furthermore, it is accompanied by the release of additional time for creative personal development as well as for the more complete enjoyment of material things. Our free economy thus affords the American people an opportunity for better living in all its aspects. These accomplishments reflect the efficiency of competitive markets as instruments for organizing and expanding production and consumption, but they do not of themselves reveal the social and individual values inherent in a free society. Among these are wide access to education and training, choice of a vocation from among many different employments or business pursuits, enjoyment of the rewards of one's own accomplishment, and freedom to plan consumption and investment according to personal preference and judgment. Moreover, our free economy gives indispensable support to the form of political life that we cherish. tutions. No form of government offers greater opportunity for individual There are instructive parallels between our political and economic instiexpression, or places heavier reliance on individual leadership and integrity. Similarly, no type of economic system offers greater opportunity for indiBut although the opportunities afforded by such an economy are evident vidual achievement or places heavier responsibilities on the individual. on all sides, the responsibilities on which it relies may be less obvious and less well understood. These responsibilities, which center on the need for preserving and strengthening the institutions of competitive enterprise, are borne in part by Government. First, Government must pursue policies that give positive encouragement to the spirit of enterprise and protect the essential incentives to work, to save, and to invest. These policies must be designed with consideration not merely to their present impact but also to their long-run effect on the vitality and resiliency of the economy. Second, Government must exercise a strict discipline over its expenditures and must |