Fiscal policy of Kennedy and Johnson administrations in the years 1961-1969

This bachelor thesis examines the fiscal policy of Presidents John F. Kennedy and Lyndon B. Johnson and its impact on the United States economy in the years 1961 to 1969. The tested hypothesis states: The fiscal policies of Presidents Kennedy and Johnson contributed positively to GDP growth and at the same time strengthened the role of the federal government in the economy. The thesis uses a combination of descriptive, explanatory and comparative methods, time-series analysis, and decomposition of GDP growth using the expenditure approach. The empirical part analyses the development of federal budget revenues and expenditures, the structure and dynamics of federal debt, and the share of federal expenditure and federal employment in the overall economy. The thesis concludes that the fiscal policies of the Kennedy and Johnson administrations indeed contributed positively to real GDP growth. However, the part of the hypothesis concerning the strengthening of the federal government’s role in the economy was not confirmed in relative terms. The added value of the thesis lies in the author’s own processing of data from official U.S. statistics, including conversion into constant prices, decomposition of GDP growth, and the construction of indicators of the federal government’s share in the economy, which make it possible to critically assess the outcomes of the Keynesian-oriented fiscal policy of the 60s.