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Increased Government Spending
One domestic problem the Kennedy team tackled was the economy. By 1960, America was in a recession.
Unemployment hovered around 6%, one of the highest levels since World War II. During the campaign, Kennedy
had criticized the Eisenhower administration for failing to stimulate growth. The American economy he said was
lagging behind those of other Western democracies and the Soviet Union.
Kennedy’s advisors pushed for the use of deficit spending, which had been the basis for Roosevelt’s New Deal.
They said that stimulating the economic growth depending on increased government spending and lower taxes,
even if it meant that the government spent more than it took in.
Accordingly, the proposals Kennedy sent to Congress in 1961 called for increased government spending. The
Department of Defense received a nearly 20% budget increase for new nuclear missiles, nuclear submarines, and an
expansion of the armed services. Congress also approved a package that increased the minimum wage to
$1.25/hour, extended unemployment insurance, and provided assistance to cities with high unemployment.
First Man on the Moon and NASA
On April 12, 1961, Soviet cosmonaut Yuri A. Gagarin became the first human in space. Kennedy saw this as a
challenge and decided that America would surpass the Soviets by sending a man to the moon.
In less than a month, the United States had duplicated the Soviet feat. Later that year, a communications satellite
called Telstar relayed live television pictures across the Atlantic Ocean from Maine to Europe. Meanwhile,
America’s National Aeronautics and Space Administration (NASA) had begun to construct new launch facilities at
Cape Canaveral, Florida, and a mission control center in Houston, Texas. America’s pride and prestige were
restored. Speaking before a crowd at Houston’s Rice University, Kennedy expressed the spirit of “the space race:”
“We choose to go to the moon in this decade and do the other things, not because they are
easy, but because they are hard, because that goal will serve to organize and measure the
best of our energies and skills, because that challenge is one that we are willing to accept,
one we are unwilling to postpone, and one which we intend to win, and the others, too.”
Seven years later, on July 20, 1969, the U.S. would achieve its goal. An excited nation watch with bated breath as
U.S. astronaut Neil Armstrong took his first steps on the moon.
As a result of the space program, universities expanded their science programs. The huge federal funding for
research and development gave rise to new industries and new technologies, many of which could be used in
business and industry and also in new consumer goods. Space and defense-related industries sprang up in Southern
and Western states, which grew rapidly.
Peace Corps and Alliance for Progress
One of the first campaign promises Kennedy fulfilled was the creation of Peace Corps, a program of volunteer
assistance to the developing nation of Asia, Africa, and Latin America. Critics in the United States called the
program “Kennedy’s Kiddie Korps” because many volunteers were just out of college. Some foreign observers
questioned whether Americans could understand other cultures.
Despite these reservations, the Peace Corps, initiated in March 1961,became a huge success. People of all ages and
background signed up to work as agricultural advisers, teachers, or health aides or to do whatever work the host
country needed. By 1968, more than 35,000 volunteers had served in 60 nations around the world.
A second foreign aid program initiated the same time as Peace Corps, the Alliance for Progress, offered economic
and technical assistance to Latin American countries. Between 1961 and 1969, the United States invested almost
$12 billion in Latin America, in part to deter these countries from picking up Fidel Castro’s revolutionary ideas
(aka communism). While the money brought some development to the region, it didn’t bring fundamental [longlasting] reforms.
Berlin Wall
The Berlin dispute had simmered ever since Khrushchev threatened (1958) to sign a separate peace treaty with East
Germany. This action would seriously threaten the status of West Berlin, as well as Western access to the city.
(Reminder, control of Berlin and Germany had been divided in half—West US and East Soviet)
The Soviets, for their part, were particularly concerned with the growing military strength of West Germany, and,
in particular, the installation of tactical nuclear weapons in West Germany. The East German government was
increasingly concerned about the defection (escape) of East German citizens moving from East to West Berlin.
On June 4, 1961, Khrushchev reissued his 1958 threat in ultimatum form, with a deadline of December 31, 1961.
Kennedy responded (June 28, July 25) with a public statement of the US determination to defend the status of
Berlin, including Western access rights, but with no mention of freedom of movement between East and West
Berlin. This may have encouraged the Soviet and East German governments to begin construction of the Berlin
Wall on August 13, 1961. That action produced an immediate heightening of tensions, including shows-of-strength
and diplomatic sanctions by both sides.
Nevertheless, this irreversible decision removed one of the issues prompting Khrushchev's ultimatum. By the end
of August Kennedy proposed negotiations which were arranged for September 21 in New York. Conciliatory letters
between Kennedy and Khrushchev were exchanged in late September. When Kennedy assured Khrushchev that the
US would not pursue the reunification of Germany, Khrushchev decided (October 17) to rescind the December 31
deadline for a settlement. Tentative agreement on a formula for a negotiated settlement regarding access right and
recognition of the boundaries of the two Germanies was reached on November 9th, although it was to take more
than a decade before a formal agreement was reached.
The Bay of Pigs
The Bay of Pigs Invasion was an unsuccessful attempt by United
States-backed Cuban exiles to overthrow the government of the
Cuban dictator Fidel Castro. Increasing friction between the U.S.
government and Castro's leftist regime led President Dwight D.
Eisenhower to break off diplomatic relations with Cuba in January
1961. Even before that, however, the Central Intelligence Agency
had been training anti-revolutionary Cuban exiles for a possible
invasion of the island. The invasion plan was approved by
Eisenhower's successor, John F. Kennedy.
On April 17, 1961 about 1300 exiles, armed with U.S. weapons, landed at the Bahía de Cochinos (Bay of Pigs) on
the southern coast of Cuba. Hoping to find support from the local population, they intended to cross the island to
Havana. It was evident from the first hours of fighting, however, that the exiles were likely to lose. President
Kennedy had the option of using the U.S. Air Force against the Cubans but decided against it. Consequently, the
invasion was stopped by Castro's army. By the time the fighting ended on April 19, 90 exiles had been killed and
the rest had been taken as prisoners.
The failure of the invasion seriously embarrassed the young Kennedy administration. Some critics blamed Kennedy
for not giving it adequate support and others for allowing it to take place at all. The captured exiles were later
ransomed by private groups in the U.S.
Additionally, the invasion made Castro wary of the U.S. He was convinced that the Americans would try to take
over the island again. From the Bay of Pigs on, Castro had an increased fear of a U.S. incursion on Cuban soil.
Cuban Missile Crisis
In 1962, the Soviet Union was desperately behind the United States in the arms race. Soviet missiles were only
powerful enough to be launched against Europe but U.S. missiles were capable of striking the entire Soviet Union.
In late April 1962, Soviet Premier Nikita Khrushchev conceived the idea of placing intermediate-range missiles in
Cuba. A deployment in Cuba would double the Soviet strategic arsenal and provide a real deterrent to a potential
U.S. attack against the Soviet Union.
Meanwhile, Fidel Castro was looking for a way to defend his island nation from an attack by the U.S. Ever since
the failed Bay of Pigs invasion in 1961, Castro felt a second attack was inevitable. Consequently, he approved of
Soviet Premier, Nikita Khrushchev's plan to place missiles on the island. In the summer of 1962 the Soviet Union
worked quickly and secretly to build its missile installations
in Cuba.
For the United States, the crisis began on October 15, 1962
when reconnaissance photographs revealed Soviet missiles
under construction in Cuba. Early the next day, President
John Kennedy was informed of the missile installations.
Kennedy immediately organized the EX-COMM, a group of
his twelve most important advisors to handle the crisis.
After seven days of guarded and intense debate within the
upper echelons of government, Kennedy concluded to
impose a naval quarantine around Cuba. He wished to
prevent the arrival of more Soviet offensive weapons on the
island. On October 22, Kennedy announced the discovery of
the missile installations to the public and his decision to
quarantine the island. He also proclaimed that any nuclear missile launched from Cuba would be regarded as an
attack on the United States by the Soviet Union and demanded that the Soviets remove all of their offensive
weapons from Cuba.
During the public phase of the Crisis, tensions began to build on both sides. Kennedy eventually ordered low-level
reconnaissance missions once every two hours. On the 25th Kennedy pulled the quarantine line back and raised
military readiness to DEFCON 2. Then on the 26th EX-COMM heard from Khrushchev in an impassioned letter.
He proposed removing Soviet missiles and personnel if the U.S. would guarantee not to invade Cuba. October 27
was the worst day of the crisis. A U-2 was shot down over Cuba and EX-COMM received a second letter from
Khrushchev demanding the removal of U.S. missiles in Turkey in exchange for Soviet missiles in Cuba. Attorney
General Robert Kennedy suggested ignoring the second letter and contacted Soviet Ambassador Anatoly Dobrynin
to tell him of the U.S. agreement with the first.
Tensions finally began to ease on October 28 when Khrushchev announced that he would dismantle the
installations and return the missiles to the Soviet Union, expressing his trust that the United States would not invade
Cuba. Further negotiations were held to implement the October 28 agreement, including a United States demand
that Soviet light bombers be removed from Cuba, and specifying the exact form and conditions of United States
assurances not to invade Cuba.
The Cuban Missile Crisis was the closest the world ever came to nuclear war. The United States armed forces were
at their highest state of readiness ever and Soviet field commanders in Cuba were prepared to use battlefield nuclear
weapons to defend the island if it was invaded.