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The 1970s

The 1970s. Economic Crisis. by mid-1960s, US spending large amts of money on Vietnam War & Great Society Programs To pay for both, LBJ increased deficit spending, but did not raise taxes Result: inflation. Economic Crisis (cont.). 1973: Yom Kipper War began (Israel vs. Arab)

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The 1970s

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  1. The 1970s

  2. Economic Crisis by mid-1960s, US spending large amts of money on Vietnam War & Great Society Programs To pay for both, LBJ increased deficit spending, but did not raise taxes Result: inflation

  3. Economic Crisis (cont.) • 1973: • Yom Kipper War began (Israel vs. Arab) • OPEC announced oil embargo (i.e. ban) to countries that supported Israel (e.g. USA) • Result: price of oil rises (200%) • Effect: US economy enters a recession

  4. Economic Crisis (cont.) By 1970, US manufacturing plants no longer competitive Reason: Japan & Germany had new, more efficient plants

  5. Economic Crisis (cont.) Effect: cheaper foreign products led to US importing more than it exported Result: w/ US plants closing, unemployment went up

  6. Nixon & the Economy • Views stopping inflation as priority #1 • Plan • 1) cut spending and raise taxes • 2) tell Federal Reserve to raise interest rates • 3) imposed a 90-day freeze on all wages & prices • EPIC FAIL!

  7. Ford & the Economy • Implements plan called WIN (“Whip Inflation Now”) • Called for: • 1) Reduced use of oil & natural gas • 2) Programs to conserve energy • 3) Cut gov’t spending + balance the Fed. budget • 4) Tell Fed Reserve to raise interest rates • 5) keep taxes low • EPIC FAIL!

  8. Stagflation Definition: combination of inflation + recession w/ high unemployment Few thought inflation + recession could happen at same time (hadn’t happened before) Result: no one knew how to fix economy Bottom line: Economy sucked!

  9. Jimmy Carter won election of 1976 • Had Little political experience (Gov. of GA) • Had image as a moral & upstanding individual (“Washington Outsider”) • Promised to: • 1) restore honesty to the Fed. gov’t • 2) pass new programs for energy development, tax & welfare reform, and national health care

  10. Carter & the Economy • Called for: • 1) Increased gov’t spending • 2) cut taxes • 3) reduce the money supply • 4) have Fed Reserve raise interest rates • EPIC FAIL!

  11. Carter & the Issue of Oil • Carter declared “war” on US dependence on foreign oil • Proposed a nat’l energy plan that encouraged use of: • Coal vs. oil • Renewable energy sources (e.g. solar) • Created Dept. of Energy • Deregulated domestic oil industry

  12. Carter’s Domestic Policy = Failure- why? • 1) Poor PR: “Malaise” speech • Left impression that economic problems were the American people’s fault, not his • 2) Lack of political experience • Made little effort to work w/ Congress • Result: Congress blocked most of Carter’s energy proposals

  13. Carter’s Domestic Policy a Failure- why? (cont.) • 3) failure to demonstrate strong leadership • Did not set clear goals for the country (“middle of the road”) • Result: public support dropped (lower than Nixon during Watergate) • Oh, that’s REALLY bad…

  14. Carter’s Foreign Policy • 2 Major goals: • Restore a positive US image in the World • Ensure human rights • Successes • 1) Improved relations w/ LA by signing treaty w/ Panama guaranteeing return of Canal to Panama in 1999

  15. Carter’s Foreign Policy: Successes • 2) Brokered Camp David Accords • Agreement b/t Israel & Egypt • Israel agreed to a complete withdrawal of Israeli forces from Sinai Peninsula • Egypt recognized Israel as legitimate country

  16. Carter’s Foreign Policy: Failures 1) Condemned USSR for human rights violations 2) Once USSR invaded Afghanistan (1979), imposed grain embargo & boycotted 1980 Olympics in Moscow Result: Détente w/ USSR began to fail

  17. Carter’s Foreign Policy: Failures (cont.) • 3) Iran Hostage Crisis • 11/1979: US Embassy overrun & 52 Americans taken hostage • Diplomatic efforts/negotiations failed to free the hostages

  18. Iran Hostage Crisis (cont.) • Carter authorizes Special Ops rescue attempt that proved a disaster (helicopters crashed & 8 killed) • Hostages released after 444 days (only after Carter left office)

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