Changes

[[File:Inflation-70s.png|left|400px|thumb|''Source: The forgotten recession that irrevocably damaged the American economy.''<ref>''[https://archive.is/wip/06Yyd The forgotten recession that irrevocably damaged the American economy], Jeff Spross, ''The Week,'' April 18, 2016. https://web.archive.org/web/20160420220408/https://theweek.com/articles/618964/forgotten-recession-that-irrevocably-damaged-american-economy</ref>]]

[[File:Inflation-70s.png|left|400px|thumb|''Source: The forgotten recession that irrevocably damaged the American economy.''<ref>''[https://archive.is/wip/06Yyd The forgotten recession that irrevocably damaged the American economy], Jeff Spross, ''The Week,'' April 18, 2016. https://web.archive.org/web/20160420220408/https://theweek.com/articles/618964/forgotten-recession-that-irrevocably-damaged-american-economy</ref>]]

Carter increased government spending. However, when [[inflation]] skyrocketed in 1978 he changed his mind. He delayed tax cuts and vetoed the spending programs that he himself proposed to the [[Congress]]. Carter then tried to ease inflation by reducing [[money]] supply and raising [[interest rates]]. All of his efforts proved to be unsuccessful. Inflation and interest rates soon reached their highest levels since [[World War II]].

Carter increased government spending. However, when [[inflation]] skyrocketed in 1978 he changed his mind. He delayed tax cuts and vetoed the spending programs that he himself proposed to the [[Congress]]. Carter then tried to ease inflation by reducing [[money]] supply and raising [[interest rates]]. All of his efforts proved to be unsuccessful. Inflation and interest rates soon reached their highest levels since [[World War II]].

 

Increases in the [[Consumer Price Index]] (CPI) reached double digits. Carter launched a time-honored tried-and-failed Wage-Price Guidelines program in which businesses could not increase prices or wages above a certain percentage or the company would be prohibited from doing business with the federal government. A company also could find itself on the prohibited list if it earned profits higher than the percentage recommended by the government. The Carter administration employed the [[marxist]] argument that higher profits are responsible for higher prices so that if a company made lower profits, its prices would be lower, too.

Increases in the [[Consumer Price Index]] (CPI) reached double digits. Carter launched a time-honored tried-and-failed Wage-Price Guidelines program in which businesses could not increase prices or wages above a certain percentage or the company would be prohibited from doing business with the federal government. A company also could find itself on the prohibited list if it earned profits higher than the percentage recommended by the government. The Carter administration employed the [[marxist]] argument that higher profits are responsible for higher prices so that if a company made lower profits, its prices would be lower, too.

=== Energy crisis ===

=== Energy crisis ===

Carter proposed a national energy program to conserve [[oil]] and promote the use of coal and renewable energy sources. He also persuaded Congress to create the Department of Energy, and asked Americans to personally reduce their energy consumption. Although oil companies were insisting on deregulation of the energy industry, Carter advocated a "windfall profits tax" to prevent oil companies from overcharging consumers. Carter's plan did not solve the country's energy crisis. In the summer of 1979 a major oil shortage in the [[United States]] took place because of instability in the middle east. After increasing pressure to act, Carter gave several televised address' where he complained that there was a "crisis of confidence that had struck at the very heart and soul of our national will." Although Carter meant the speech to be a timely warning, many Americans interpreted it as President Carter blaming the public for his failures. Critics dubbed it Carter's "[[malaise|malaise speech.]]"

Carter proposed a national energy program to conserve [[oil]] and promote the use of coal and renewable energy sources. He also persuaded Congress to create the Department of Energy, and asked Americans to personally reduce their energy consumption. Although oil companies were insisting on deregulation of the energy industry, Carter advocated a "windfall profits tax" to prevent oil companies from overcharging consumers. Carter's plan did not solve the country's energy crisis. In the summer of 1979 a major oil shortage in the [[United States]] took place because of instability in the middle east. After increasing pressure to act, Carter gave several televised address' where he complained that there was a "crisis of confidence that had struck at the very heart and soul of our national will." Although Carter meant the speech to be a timely warning, many Americans interpreted it as President Carter blaming the public for his failures. Critics dubbed it Carter's "[[malaise|malaise speech.]]"