page_title: Economic Stimulus Appropriations Act of 1977
section_title: Developments under the Act and estimates of the Act's effects
hierarchical_section_title: Economic Stimulus Appropriations Act of 1977 / Developments under the Act and estimates of the Act's effects
caption_attribution_description: English: Believed to be in Public Domain From Library of Congress, Prints and Photographs Collections. More on copyright: What does "no known restrictions" mean? ______________________ For information from Creative Commons on proper licensing for images believed to already be in the public domain please-- click here. By using this image from this site, you are acknowledging that you have read all the information in this description and accept responsibility for any use by you or your representatives. You are accepting responsibility for conducting any additional due diligence that may be necessary to ensure your proper use of this image. ________________ Based on information from the source, this image is believe to be in the public domain. It is up to the user to make their own determination. Additional information is provided below, usually the entire online file, to assist you in doing so. Public domain images SHOULD NOT BE ATTRIBUTED TO PINGNEWS. Please attribute the repository and the originator. If you can add "via pingnews" or a link back to this site it is appreciated. While it may appear with this image, the attribution license does not apply to pingnews in this instance as we are neither the creator of nor the archive for this work. _________________________ Public Domain. Suggested credit: O'Halloran/Library of Congress. Additional information from source: TITLE: Floor of the New York Stock Exchange / [TOH]. CALL NUMBER: USN&amp;WR COLL - Job no. 10548, frame 6 [P&amp;P] REPRODUCTION NUMBER: LC-U9-10548-6 (b&amp;w film neg.) LC-DIG-ppmsca-03199 (digital file from original) No known restrictions on publication. SUMMARY: Photograph shows stock brokers working at the Stock Exchange. MEDIUM: 1 negative&#160;: film. CREATED/PUBLISHED: 1963 Sep. 26. CREATOR: O'Halloran, Thomas J., photographer. NOTES: Title from contact sheet folder caption. U.S. News &amp; World Report Magazine Photograph Collection. Contact sheet available for reference purposes. SUBJECTS: New York Stock Exchange--People--New York (State)--New York--1960-1970. Stock exchanges--New York (State)--New York--1960-1970. Stockbrokers--New York (State)--New York--1960-1970. FORMAT: Film negatives 1960-1970. REPOSITORY: Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA DIGITAL ID: (original) ppmsca 03199 hdl.loc.gov/loc.pnp/ppmsca.03199 CARD #: 2003673967
context_page_description: The Economic Stimulus Appropriations Act of 1977, was a stimulus package enacted by the 95th Congress and signed into law by President Jimmy Carter on 13 May 1977. Developed in response to the longest and deepest economic recession post World War II, the primary objective of the stimulus package was to provide the economy with a boost.
  The bill’s rationale was based on Keynesian Economic Theory, providing tax reductions and increasing jobs to boost private spending, preventing the economy from any further slowdown. The approximate cost of the bill was estimated to be $20.1 billion spread across 1977 and 1978, where the Act helped to create 9.3 million jobs, the largest increase in job creation for any presidency. The Act was a contributing factor to Stagflation, which was apparent when Carter took over the office but worsened towards the end of his term.
  The politics around the stimulus made the Act highly controversial. The Republicans felt that the Act was overcompensating, while on the left, many Democrats felt that the was not doing enough and was not big enough. Economist Milton Friedman argued that the tax cut would have little effect on consumption and GDP.
context_section_description: Carter’s advisors initially felt that a two-year economic stimulus program would better help to restore the economy. The original Act was priced between $25 billion to $32 billion, claiming that a more comprehensive stimulus plan spread over two years would be more suitable for the economic situation at the time. However, as Carter’s aides further examined the situation, a conclusion was made that a one-year program would be more palatable, both economically and in Congress. Schultze presented in front of a congress committee, stating that with the stimulus in place, the country’s real GNP would be from 5% to 6% between the fourth quarter of 1976 to 1977. However, without the stimulus, the growth rate would be at a lower 4.5% to 4.75%.  He also alluded to the potential of an additional stimulus if growth was not up to projection. 
  At the State of the Union address in 1981, President Carter announced that the bill had generated 425,000 public service jobs, and the youth employment initiative has helped fund over 200,000 jobs. Additionally, the slots at Job Corps were increased to 44,000 by a total of 100%, and a million summer youth jobs were approved. However, an analysis done by survey firms in 1978 stated that the impact of jobs credits was limited, with many firms were unaware of the existence of such programs. While more than 2.0 million people participated in CETA programs which helped to reduce the unemployment rate, disparities were still present across genders, races and locations. A study revealed that while the unemployment rates among whites declined from 7.8 to 6.4 percent, unemployment among African Americans failed to show any reduction.
  A further study done by senior Carter Administration Treasury Official Emil Sunley and economist Ned Gramlich stated that the bill had little effect. The bill resulted in heavy inflation that led to the eventual recession in 1980. The period was later known as the time of Stagflation, where both inflation and recession occurred at the same time.
  The administration’s focus on full employment led to the country’s eventual problem of inflation. Carter’s aides were aware of the inflation problem when they entered office in 1977, but they thought they were able to control it. Carter’s aggressive fiscal and monetary policies called for an increase of money supply by the Federal Reserve. This led to a spike in inflation, climbing to 13.3 percent in two years.  Even though there was a rise in inflation, unemployment failed to decrease, resulting in a period of high prices and unemployment. It took Paul Volcker, the 12th Federal Reserve Chairman, to bring inflation back down with the “Volcker Shock”. The strategy implemented, led to the raised interest rates and limiting the country’s liquidity to bring down inflation.
caption: New York Stock Exchange
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