President Lyndon Johnson's Economic Policies

How LBJ's Presidency Affects You Today

LBJ in a meeting.
••• Credit: Yoichi Okamoto for LBJ Library

Lyndon Baines Johnson was the 36th U.S. President. He served from 1963 - 1969. He was sworn in on November 22, 1963, two hours and nine minutes after President John F. Kennedy was assassinated. After completing the final year of JFK's term, he was elected in 1964 with 61 percent of the votes. It was the widest popular margin in American history. This mandate allowed him to expand the federal government's role.

LBJ's increased government spending added $42 billion, or 13 percent, to the national debt. It was nearly double the amount added by JFK, but less than a third added by President Nixon. In fact, every president since Johnson has increased the debt by 30 percent or more.  For more, see U.S. Debt by President.

Today, you have LBJ to thank for Medicare, Medicaid, and urban renewal. He also championed the right for minorities to vote, ride buses and go to school the same as whites. Without his Great Society program, there would be no National Endowment for the Arts or Humanities, no Public Broadcasting Corporation, or drivers education. You also have him to thank for the scar of the Vietnam War, which he escalated but could not win.   

War on Poverty

Soon after being sworn in, LBJ  declared a War on Poverty. That was his way to push through passage of Kennedy's tax cut and civil rights bill. Although the unemployment rate was only 5.5 percent overall, it was 25 percent for black youths. The percent of families living below the poverty level wasn't getting better. In fact, the number of children on welfare had nearly doubled between 1950-1960 to 2.4 million. 

The War on Poverty was coordinated by community action agencies. These federal CAA were controversial because they managed both federal and state programs. These included social services, mental health, medical care, and job programs. In 1964, Congress passed the Economic Opportunity Act, creating one office specifically to run these agencies. 

The tax cuts and government spending boosted economic growth, making LBJ one of the few Presidents to avoid any recessions. In the 1970s, the Federal Reserve had to resort to contractionary monetary policy to cool growth and end double-digit inflation. For more, see Unemployment Rate by Year and GDP by Year

The Great Society 

In 1964, LBJ ran against Arizona Senator Barry Goldwater on a platform of building a Great Society.  He outlined his vision on May 22, 1964, in the commencement speech at the University of Michigan. Here, Johnson asked the nation to move not only toward "the rich society and the powerful society but upward to the Great Society." With it, America would "end poverty and racial injustice." It changed the definition of the American Dream from one of opportunity to one that guaranteed well-being.

Johnson expanded the national government with both policies and funding. The Great Society covered education, healthcare, urban renewal and redevelopment, beautification, and conservation. It continued the War on Poverty, created new programs to prevent crime and delinquency, while increasing voting rights. It required the states to meet Federally designated minimum commitments. 

Johnson created the Department of Housing and Urban Development, which was responsible for public housing and redevelopment of slums. Most important, Johnson pushed through both Medicare to cover hospitalization for seniors, and Medicaid, providing health care for those below the poverty line. Since his election created Democratic majorities in both the House and Senate, these programs were passed with few amendments. 

LBJ's support of the space race allowed three astronauts to orbit the moon in 1968. He told them, "You've taken ... all of us, all over the world, into a new era. . . . "

LBJ and Vietnam

In 1965, Johnson sent 100,000 combat troops to Vietnam. By 1968, he increased the defense budget to support 500,000 troops. American casualties grew as the North Vietnamese appeared to be winning. That because Johnson merely wanted to support the South Vietnamese until they could take over. He didn't plan to win. 

Over time, LBJ faced an anti-war movement. His approval rating plummeted below 30 percent. When both Senators Eugene McCarthy and Robert Kennedy announced their candidacies for President in 1968, he withdrew from the race. He died of a heart attack in 1973. He lies buried in an oak stand along a riverbed at the LBJ Ranch. 

Johnson's Early Years

LBJ was born on August 27, 1908, in central Texas. His compassion for the poor began as he worked his way through Southwest Texas State Teachers College as a teacher to Mexican immigrants. In 1937 he was elected to the House of Representatives, following the New Deal policies of FDR. He attended, but didn't graduate from, Georgetown Law School. During WWII, he received a Silver Star as a Navy lieutenant commander in the South Pacific.

In 1948, he was elected to the Senate after serving six terms in the House. In 1953, he became the youngest Senate Minority Leader in history. He became the Majority Leader a year later. He exhibited great skill as a bi-partisan negotiator by enabling passage of the Civil Rights Act of 1957. He also pushed for America's entry into the Space Race. 

In 1961, Johnson became Vice-President under JFK, bringing in the southwest states' votes needed to win. Although never in Kennedy's inner circle, he was in charge of many domestic programs. This included NASA, a nuclear test ban treaty, and civil rights. He also publicly supported sending military advisers into South Vietnam. 

Other Presidents' Economic Policies