private housing for middle-and high-income groups, 0.5 million should be lowermiddle income housing with low-interest long-term loans and cooperaitve housing, and 0.5 million should be low-rent and low-cost sale housing with public subsidy. My other charts relating to home construction, and relating to Federal outlays in connection therewith, are consistent with this chart. Where we stand now in 1970 is a tragic illustration of how we have not only fallen short of these goals, but actually moved at great speed in absolutely the wrong direction. DEFICIENT U.S. ECONOMIC GROWTH AND ITS COSTS I turn now to recent and current economic trends, and to national economic policies bearing upon these, as an essential point of departure for examining why housing and supportive urban construction has gone so wrong, and what to do about it. The problem of inadequate real U.S. economic growth has now once again come to the forefront. Indeed, we have neglected this problem sorely during recent years. As chart 14 shows, we are all familiar with the average real rate of U.S. economic growth of only 2.4 percent during 1953–1960, with its alternating periods of short upturns, stagnations, and then recessions. I do not share the view that we have made much progress, and certainly we have not made an acceptable degree of progress, toward the solution of this critical problem. The upward movement of the economy from 1960 to 1964 was in the nature of an automatic but greatly inadequate recovery from the late 1960 recession, similar to the automatic but greatly inadequate recoveries from the recessions of 1953-1954 and 1957-1958. National policies and programs cannot claim much credit for the 1960-1964 upturn. From 1964 to 1966, the rewarding economic growth rate of the economy in real terms was considerably responsive to the massive tax cuts of 1964. But the stimulus was only temporary, for reasons which I forecast at that time. Indeed, the ill-designed nature of these tax cuts maintained or aggravated the long-range distortions and imbalances. Thus, as shown on chart 14, the average annual real economic growth rate was only 3.4 percent during 1966-1969. The real growth rate was only 2.3 percent from 1968 to 1969, only 1.7 percent from fourth quarter 1968 to four quarter 1969, and zero or slightly negative from third to fourth quarter 1969. Current business indexes would seem to indicate that we are now in an absolute recession, although it has not yet gained cumulative force. We do not sufficiently stop to quantify how much these successive periods of short upturns, stagnations, and then recessions have cost us. Chart 15 offers such a quantification. Measured in 1967 dollars, our failure to sustain the maximum employment, production, and purchasing power which is the objective of the Employment Act of 1946 caused us to forfeit more than $900 billion of total national production during 1953-1968 as a whole, and to forfeit accordingly almost 39 million man-years of employment opportunity. If we should average during the years ahead a record no better than this, and the performance since 1966 augurs no better on the average, we will forfeit during the years 1969–1977 inclusive almost $1.2 trillion of total national production, and also more than 31 million man-years of employment opportunity. Nobody concerned about the future of our country, especially in view of our alleged current inability to meet human needs adequately, can view this prospect with equanimity. Chart 16 makes this portrayal more vivid. Measured in fiscal year 1969 dollars, it shows that, during the years 1969-1977 inclusive, a repetition of the economic growth rates of 1953-1959, in contrast with sustained maximum production and employment, would cause us to forfeit an aggregate of more than 1.2 trillion of national production, or an annual average of about $137 billion. I have already stated that residential construction and related improvements will be called upon to assume a very large portion of the job-creation responsibility. This is due, not only to varying rates of technological displacement, but also to the fact that the growth in productivity in general will be much faster than most analysts have been willing to admit, and also much faster than has been assumed for the purposes of recent and current national economic policies. As chart 17 shows, the average annual increase in productivity or output per man-hour in the entire private economy rose from 0.4 percent during 1910-1920 CHART 14 U.S. ECONOMIC GROWTH RATES,1922-1969, AND NEEDED RATES, 1968-1977, FOR OPTIMUM RESOURCE USE Average Annual Growth Rates in GNP, Constant Dollars CHART 15 COSTS OF DEFICIENT ECONOMIC GROWTH Based upon true level of unemployment concept, including full-time unemployment, full-time equivalent of part-time unemployment, and concealed unemployment (nonparticipation in civilian labor force) due to scarcity of job opportunity. Basic Data: Dept. of Commerce; Dept. of Labor |