The Economic And Political Problems Of The 60's And 70

Milton Friedman and John Keynes are two world renowned economist, with many similar and contrasting views that have helped set the foundation of our economy. Friedman 's ideology on subjects such as the Monetary Policy, Gold Standard, and the Theory of the consumption function are what made him a extremely impactful economist. Keynes has made his impact on the modern day world as well in many aspects. Both of these economists have helped pave the way to a better, more efficient economy.

In addition, Reagan’s 1981 Program for Economic Recovery had four major policies, which are: to reduce the growth of government spending, reduce the marginal tax rates on income from labor and capital, reduce regulation, and to reduce inflation by controlling the growth of the money supply (Niskanen). Reagan’s Economic Recovery Program, also known as Reaganomics, was the most serious recession of the U.S. economic policy since Franklin D. Roosevelt’s New Deal (Niskanen). However, according to historian, Eric Foner, there have been many issues with Reaganomics since the new policies, rising stock prices, and deindustrialization inevitably resulted into the rise of economic inequality, also known as the second gilded age (Foner 832).

Life in America began to undergo great economic and social changes during the 1980s under the Reagan Administration. During this period of time, stagflation began to distress the US economy, leaving millions of Americans to fall victim to homelessness and poverty. The unemployment rate had reached its highest peak since the Great Depression, creating a major crisis for low-income families and other individuals concerning living conditions. The introduction of Reaganism into society primarily focused on reducing the growth of government spending through the modulation of federal income tax and reduction of government regulation to diminish inflation. Despite all attempts for economic recovery, the US struggled to bounce back from the 1970s recession and in time led to the significant rise in urban poverty. Uniquely, an American film director from the 1980s by the name of John Carpenter produced a science-fiction film, They Live, that served as a powerful and eye-opening depiction of his own personal views of Reaganism (Reaganomics). He essentially depicts our world to be controlled by powerful elites who have created a repressive society that we are unwilling brought to live and build in. He also clarifies how the majority of Americans during the 1980s were focused primarily on materialism and how an individual’s “success” was measured by the amount of money they possessed. Carpenter’s major criticisms of 1980s America included the impact of consumerism in America as well as

The 1970s were a time of confusion and revolution in the United States. Integration finally prevailed in the public school system, with the major incident being in Little Rock, Arkansas. The United States went through an extreme energy crisis in the 1970s. Both Welfare and Social Security went through drastic reform policies throughout the decade. In addition, the U.S. economy fluctuated throughout the decade creating both good and bad times for many, as inflation rates hit an all-time high. The 1970s was an extremely influential decade in America's history, and one that helped to shape following decades.

Reaganomics—also known as supply-side and trickle-down economics—is an economic policy practiced by presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover in the twenties and most recently, by the fortieth president of the United States, Ronald Reagan. Just like the state of the economy before Reagan stepped into office, the economy of the United States today is in a vulnerable place. The economy has taken multiple blows over the last few years: a recession in 2008, a close call in 2011, and an overwhelming deficit. Most Americans are looking for something to change. While some are advocating for an increase in the government’s power in order to step in and seemingly help the people, the way for the government to truly succor

Hayek believed the economy should remain untouched and in times of trouble, with enough time, the markets would regain equilibrium. He also surfaced the ideas that increasing taxes led to discouragement of consumer spending. These ideas are viewed as flawed because during times of depression unemployment remains constant and there is so guaranteed time issues will resolve while the economy is trying to rebalance itself. No government regulation results in unfair monopolies of industries or businesses in the free market. This restricts modern liberal principles such as the equality of outcome. No government intervention is an ineffective way to structure the economy. It allows for numerous issues such as cheap labor, overpriced goods, non-equal wages. All issues could be resolved through government action and regulation. Hayek’s ideas can be closely ties with those of the Untied States president in 1981, Ronald Reagan. Reagan upheld a huge economic practice know as “Trickle-Down Economics”. This practice involved an attempt to redistribute wealth among different social classes. The government would cute taxes on wealthier citizens with hopes the wealth would trickle down in the economy through mass spending of the elite. This effect was never successful in practice, by cutting taxes for the rich it left them with a high concentration on wealth. This practice aimed at the wrong target and did not prevent relative poverty; it just increased the economic gap between the rich and poor. Both theory’s are evidently flawed and validate the need for a government to obtain economic responsibilities. Regulations ensure an equal ground for the mixed market, which is a key aspect in a stable economy. Modern liberal principles require government involvement to achieve economic

How did the events from the later 1960’s and through the 1970’s contribute to cynicism and mistrust toward the nation’s leaders, especially those in politics?

Reagan implemented policies based on supply-side economics and advocated a classical liberal and laissez-faire philosophy, seeking to stimulate the economy with large, across-the-board tax cuts. Reagan’s outlook on economics was what he and the public called “Reaganomics”. “The blueprint for “Reaganomics,” was a sketched out supply-side approach to the economic, including massive cuts in income taxes, capital gains taxes, and corporate taxes,”(340). His platform advocated reducing tax rates to spur economic growth, controlling the money supply to reduce inflation, deregulation of the economy, and reducing government spending. Reagan's policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment, which would then lead to increased economic growth, higher employment, and wages. Reagan’s beliefs on cutting taxes were supported by ideas of William Sumner who believed that the best equipped to win the struggle for existence was the American businessman, and concluded that taxes and regulations serve as dangers to his survival. Reagan believed strong nations were composed of people who were successful at expanding their empires and these strong nations would survive in the struggle for dominance.

Leading up to the year 1981, America had fallen into a period of “stagflation”, a portmanteau for ‘stagnant economy’ and ‘high inflation’. Characterized by high taxes, high unemployment, high interest rates, and low national spirit, America needed to look to something other than Keynesian economics to pull itself out of this low. During the election of 1980, Ronald Reagan’s campaign focused on a new stream of economic policy. His objective was to turn the economy into “a healthy, vigorous, growing economy [which would provide] equal opportunities for all Americans, with no barriers born of bigotry or discrimination.” Reagan’s policy, later known as ‘Reaganomics’, entailed a four-point plan which cut taxes, reduced government spending,

Since the beginning of time people have been affected by their income and ability to accumulate wealth. People live their lives spending or saving money based on their own expectations of what the economy might do. For hundreds of years we have studied how the economic decisions of individuals and governments affect the welfare of society as a whole. John Maynard Keynes introduced a new economic theory that emphasized deficit spending to help struggling economies recover. Keynesian economics revolutionized the traditional thinking in the science of economics. His ideas and theories were deemed radical for his time but were later enacted by some of the largest governments in the world including the United States during the Great Depression. President Franklin Roosevelt enacted the New Deal in an attempt to stimulate the economy through government spending. In this paper I will be giving background to the history economics, the Great Depression, the New Deal, the development of Keynesian Economics. This paper will focus on analyzing the following question: In an attempt to address high unemployment and economic contraction, was Roosevelt’s The New Deal efficacious in stimulating the economy and ending the Great Depression?

In 1932, when Franklin Delano Roosevelt took office, the citizens of the United States had possessed sufficient time to realize that they could no longer be proud, but they must take anything they could get. Therefore, the programs set up by FDR’s New Deal program were perfect for the country at the time. These programs helped the people directly, providing relief, recovery, and reform. FDR based his plans on the philosophy of Keynesian economics, where the government spends money to make money. The government gave money and jobs to those in need, who in turn, had money to spend in the marketplace. The demand for products increased, and businesses were able to hire more workers and produce more products, as well as pay more money in taxes. FDR’s plans worked because they gave money not to those who would take advantage of the government, but to those who would use it in the way the government intended it to be used. During FDR’s first term in office alone, the unemployment rate dropped 4%. Because of FDR’s success in bringing the country out of the Depression, I give him an A.

The 1970s can be best understood as a transitional period in America. Starting in the 1950s, the power of the youth was on the rise, through civil rights activism and anti-war protests. This decade’s ideal citizen seemed to be the person helping others. Then the 1980s are more financially centered and individualistic. This decade’s ideal citizen is the one who measured success by how much money they made. The 1970s proved to be a time of bitterness, cynicism, and increased interest in one’s self for most of the people in America. Some of the events that contributed to this were the Kent State Massacre, Roe v. Wade, and the economic stagflation that happened in the latter part of the decade.

Milton Friedman’s ideas where thought to be radical, but he was the most authoritative figure in the economics field in the 20th century, (Placeholder2) and was known most for his thoughts on free enterprise, classical liberalism and limited government. (Placeholder3) His views shaped modern capitalism. (Placeholder2) He was against government intervention and favored free markets (Placeholder6).

Milton Friedman is the author of many books and two public television series that he did with his wife Rose: Free to Choose(1980) and Tyranny of the Status Quo(1984). His most important books include Free to Choose and Tyranny of the Status Quo( both of which compliment the TV series), Capitalism and Freedom(1962 with Rose D. Friedman); and Bright Promises, Dismal Performance (1983), which consists mostly of reprints of tri-weekly columns that he wrote for Newsweek from 1966 to 1983. Also, A Theory of the Consumption Function(1957) and A Monetary History of the U.S.(1963 with A.J. Schwartz).

For instance, in 1988, the U.S. was confronted with high inflation and decreased consumer spending. While prices rose quickly, the nation's people began to save their money, rather than invent it in the economy. It was President Ronald Reagan's ideas to reduce the government's involvement in the situation that helped to improve economic conditions. By cutting taxes to increase consumer spending, and by restricting the supply of money in the economy, he reduced the inflation from 13% to 4%. Instead of actively taking part in controlling all aspects of the economy, the government helped to solve the problem of inflation through limited involvement in the situation. The nation's people were still free to make their own economic decisions, and by reducing the taxes, citizens were able to spend more in the market. With more money begin invested in the economy and in individually owned business, there was also a demand for in the economy and individually owned businesses, there was also a demand for workers to produce the goods that the consumers now desired. By taking little government action, Regan stirred the economy, decreased unemployment involvement was necessary in the repairing of the country's economy, the amount of state control was limited.