New Global Policy

To fight the gold war, President Kennedy this week put forth a program aimed at a reduction of U.S. spending abroad and an increase in foreign spending and investment in the U.S. Key proposals:

P: Cut the amount of duty-free foreign goods that U.S. tourists can bring back, from $500 to $100.

P: Reduce U.S. defense procurement abroad and spend more at home "even though this will lead to some extra cost."

P: Tighten the loopholes through which U.S. companies can channel profits into foreign "tax havens."

P: Set up a double standard of interest rates, so that foreign governments that bank their funds in the U.S. would get higher interest than U.S. institutions do.

P: Expand the credits to U.S. exporters through the Export-Import Bank.

But the President opposed higher tariffs. The solution lay in making U.S. goods and services more competitive in world markets. Through his new Labor and Management Policy Advisory Group, chaired by Labor Secretary Arthur Goldberg, the President would seek to "encourage productivity gains, advance automation, and encourage sound wage policies and price stability."

Because the economies of free nations are becoming more interdependent every day, the Western nations should look toward the day when they can cooperate more closely on fiscal policies, said Kennedy. He recommended a study to determine whether a new global financial agency should be founded to smooth out the cycles of boom-and-bust, surplus-and-deficit, by helping to regulate interest rates, money movements and fiscal policies throughout the non-Communist world. To create and join such a bank would require some sacrifice of economic sovereignty, but Jack Kennedy asked the Treasury to consider the idea.

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