The United States Economy Expanded During The Ronald Reagan Presidency

Reaganomics was economics policies which were propelled by United States President, Ronald Reagan during 1980s. These policies were based on fours pillars namely; reduction of the growth of government spending, reduction of income and capital gains marginal tax rates, reduction of government regulation of economy, and controlling of the money in supply so as to reduce inflation. Their basic aims were to lower taxes and create a leaner government. According to Reagan his decision was informed on stimulation of the economy taxes, financed by borrowing. Lowering taxes was aimed at reviving the economy, which in turn would see the increased tax revenues being used to offset the debts incurred (Niskanen

Ronald Reagan created economic policies called Reaganomics. These policies were different than the policies that the United States had since Franklin

Reagan really focused on improving the economy during his presidency, with a plan he called Reaganomics, or supply side economics. The main parts of this plan were cuts on taxes and budgets, and monetary policy. Also, he wanted to reduce government regulation on businesses. He thought that these and increasing defense expenditures would heighten economic efficiency. Reagan managed to cut taxes by twenty five percent in three years. However, the plans did not work out at first, causing a recession that some call “The Great Inflation.” The national debt heightened substantially, and the rate of unemployment reached up to eleven percent. Despite these negative outcomes, the economy experienced a sudden growth and prosperity in 1983, which was

Conte & Karr (2001) report the economic growth of the 1980’s in the United States sees President Regan cutting taxes and slashing social programs. President Reagan also

While Reagan was in office the economy grew, inflation lessened, employment increased, and national defense was strengthened. He helped the economy by cutting taxes and government expenses. In 1984, Reagan won a second term due to his brilliance in his first. At the end of his presidency the nation had the longest period of peacetime prosperity without recession or depression.

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).

This, however, created chaos in other public programs for instance, Medicare and Social Security. Reagan was fairly ‘laissez faire’ and delivered on his promise to decrease government-intervention by reducing federal regulations on business and industry, a policy preferably known as deregulation which had begun under Carter’s presidency (Newman and Schmalbach 650). Nevertheless, Reagan opposed labor unions-he once fired thousands of striking air traffics who were against their contracts- and many businesses followed suit by taking strict measures against striking. As a result, labor union membership and striking drastically decreased as the economy grew tough during the Recession of 1982, and foreign competition for American jobs made jobs insecure and negatively affected worker’s wages (Newman and Schmalbach).

One major reason Ronald Reagan was able to defeat Carter in the election of 1980 was because Carter failed to rescue the hostages from the American embassy, prior to the election. He had already run for president in 1968 and in 1976, but didn’t win until 1980 as a Republican nominee because he established himself as the conservative candidate with the support of like-minded organizations such as the American Conservative Union. Reagan had several policies to try to recover the economy, one of them being deregulation, in which he advocated limiting government involvement in business. Following this policy, he deregulated several industries from government control. Another policy was to reduce inflation by controlling the growth of the money

Politics in the U.S. during the 1980’s were exciting. Much like everything else during this decade, politics were changing and making a new way for economic development and social construct. Policy in the 1980’s were both huge on foreign policy, and domestic development. The cold war, being the main concern with foreign policy, consisted of Communism versus Democracy, or Socialism versus Capitalism. President Reagan being the face of America and our Commander and Chief, created “Reaganomics,” which fought for small Government, and utilized Government spending in a way that would effectively establish National Security as well as make a name for himself as being known as one of the most popular presidents in United State’s history. Though these issues took place some thirty years ago, it is safe to say that the tribulations we faced as a nation in the eighties have directly affected society in 2015.

President Reagan’s radical tax cuts lead to a decrease in unemployment and an increase in incomes for Americans of all statuses. Despite the fact that, “in the late 1970s, the US economy was experiencing what was then the greatest economic crisis since the great depression… almost every economic measure substantially improved after Reagan’s reforms took effect” (Hannaford). Editors Pat Hannaford and Darcy Allen observe that, “by reducing America’s tax burden, Reagan’s

Reagan increased defense spending. U.S. exports were falling, creating a negative balance of trade where the country was buying more from foreign countries than it was selling to them.

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,

As President, Ronald Reagan encountered many significant events; from surviving an assassination attempt, to the space shuttle Challenger disaster. Perhaps the most significant event was the economic downturn. He came to office (much like President Obama) in the midst of an economic crisis; however, President Reagan was able to turn the economy around. How did he do this? In order to answer this question, you must first ask what the economy was like when he was sworn into office, how his policy changed from the prior administration’s policy, and how it contrasts our present economic policy.

Reaganomics refers to economic policies implemented during President Reagan’s administration from 1981-1989. The main ideology of Reaganomics was conservation which promoted that “government is the problem, not solution”. That means, society and market would function better with limited government power and regulations. Accordingly, Social wealth was distributed by unrestricted market, and profits that capitalists earned would trickle down to the bottom of society. In this way, people were in charge of improving their lives instead of relying on the aid of government. In order to recover from the economic crisis occurred between 1981and1982, the major Reaganomics objectives was to reduce government intervention in business and social aids. The policies were specified as marginal tax cut, tightening money supply, reducing social welfare programs and regulations. Generally, Reaganomics that impact citizens the most would be tax cut, reducing welfares and regulations.