Reagan Flashcards
4 question source types
Effect of Reagans economic policy
Extent to big government being reduced
Nature/extent of social change
Extent to US policies being revitalised
Context behind why Reagan was necessary
After Watergate Republican presidents hated and after Ford pardoned Nixon for Watergate peoples confidence in the presidents were diminished.
Carter due to being an incompetent president placed ratings for those that thought Carter was doing a good job at the lowest ever seen by a president in US history at 21%.
Due to Wall St Crash and Great Depression of the 1930s federal intervention at its highest. Due to FDRs New Deal, Truman’s Fair Deal, LBJ’s Great Society- causing issues as welfare being abused. Reagan argued the US were a nation ‘dependant on welfare.’
In a period of stagflation wages not rising and price of goods are= money worthless- due to Vietnam War/Oil Crisis of 1973/1979
Reagan policies:
- Shrink big government
- Reduce welfare
- Reduce taxes
- Monetarism- Monitoring money supply- tight control
- Reaganomics- Umbrella for all of policies
- Supply side economics- Taxes cut= more investment= more profit= more jobs
- Deregulation= cut red tape- not the governments job to help businesses- bureaucracy
- Trickle down theory
- High employment
Isn’t just to make rich richer, keep arguments balanced in sources
Doesn’t trickle down to some minorities
‘Less government in business, more business in government-‘ Warren G. Harding- Reagan believer in this- Republican ideologies- rugged individualism/laissez faire
Keynesian economics– Big government jobs= Hoover dam- people back to work- Monetarism opposite
More Reagan policies:
- ERTA- Cut tax Took 7 months
to
get through Congress-
35 billion used - - ORA- Cut welfare - Presidential executive order in Reagan’s first 100 days passed deregulation
- Took a hard line against trade unions and sacked air traffic control after their strike
Reagan facts
- 1984 landslide election only 1 state didn’t vote for him- state of his opponent
- Walter Mondale against
Did Reagan succeed at Reducing Big Government:
Yes:
- Omnibus Reconciliation Act reduced federal spending by 35 bil in non-defence areas. ERTA- Biggest tax cut in history
Workfare championed through the 1980s- ‘best form of welfare is a job.’ Workfare- Nixon
Job Training Partnership Act (1982) and Social Security Reform Bill (1983) privatised attacking unemployment and support the poor. Changes were made to eligibility criteria- deregulation/big government an example
Foreign investment actively encouraged supported through Foreign Trade and Competiveness Act. Reduced government subsidies required to support businesses and reduced the government net spend
Minority groups controversial for- social issues- changed to big government and spending proved popular- VP won election in 1988 due to Reagninism- Bush
Did Reagan succeed at Reducing Big Government:
No:
ORA and COBRA cut or transferred spending
Political: Reagan Years
Decade of ineffective leadership. American electorate was disillusioned. Voting turnout al time low since 1948 election
Reagan promised change, leadership, a firm grip on US economy and to make ‘America Great Again.’
Reagan proposed a shift in liberal ‘Great Society’(LBJ’s baby) which he believed was weakening USA (too many on welfare) and vowed to fix economy, lower taxes and reduce ‘Big Government’
Reagan asked electorate whether they felt better than 4 years before, knew answer no
Economic: Reagan Years
First 100 days. Ended Iranian Hostage Crisis almost instantly, almost assassinated, deregulated fuel prices and wages, managed to convince Democratic Congress (conservative leaning) to pass Reaganomics programme
Reagan presented Program for Economic Recovery to Congress 1981
ERTA (Economic Recovery Tax Act) introduced variety of tax cut’s that cut Federal Spending by 35 billion (Reagan requested 45 billion)
Rapid recovery followed by sharp depression but by 1984 economy thriving
Social: Reagan Years
Reagan’s ‘New Right’ thinking statement of rejection to leftist ‘Great Society’ attitudes of 1970s
Condemned moral permissiveness, supported traditional family values and was a counter to the perceived increase of ‘lazy’ and ‘welfare dependent’ poor, rising number of strikes and law and order
1981-96 situation of poorest Americans worsened considerably. Many welfare benefits capped and eligibility made harder
Homelessness became a major issue
Some 140 billion reduced from welfare and 181 billion put into national Defence
Popular and Legacy of Reagan
Reagan years saw increase in suburban ‘white flight and expansion of middle class white suburbia
Reagan did nothing for racial/gender equality
1986 Iran-Contra Scandal tarnished Reagan’s image
Reagan popularity rating at 70% when he left office, highest since FDR
Charismatic, great delegator, clear goals, fulfilled is promise of re-establishing the USA’s global prestige, defied Soviets’, restored confidence and dignity to the presidency and made America ‘great again’
George Bush election as President in 1988 owed much to Reagans popularity
Reagan Strike example
1981, 13,000 air traffic controllers went on strike = declared illegal by Reagan, told must work or fired=refused so fired due to safety concerns.
Reason for Reaganomics
FDR’s New Deal and LBJ’s Great Society caused welfare dependant America - created Big Government
Reagan aimed to control government spending, reduce government intervention and to ‘liberate ‘ enterprise through deregulation and tax cuts
Influenced by ‘supply side’ economics’ economy not driven by consumer demand but maintaining high production, high savings and investment . Trickle down also used.
Reagan’s 100 days
Reagan’s budget passed by Congress ERTA- economic recovery tax act and Omnibus Reconcilliation Act- ORA
ORA
Reduced government spending ,especially welfare, even agreed to cut food stamps, student loans and sickness benefits
Affected working poor
REMEMBER FOR REVISION O IN ORA ONLY BENEFITED RICH
ERTA
Cut to federal spending allowed for ERTA tax reductions
Top rate tax cut 70%-50% over 3 years
Lowest tax cut from 14%-11%
Capital gains tax tax reduced from 28%-20%
Taxes benefited more wealthy than poor
Reduced taxes by about 33 bil- used media extensively
E IN ERTA EVENTUALLY CUT FEDERAL SPENDING ALLOT
Reagan and Congress
Good relationship
Conservative Senate, Demcoratic House of Representatives
Divided government had to get through
Tip O’Neill said more beneficial than Carter ever been to them (Reagan)
Exploited public due to nearly being assassinated
Reagan De-Regulation
Reduce ‘Red Tape’- Harding’s ‘less government in business, more business in government.’
De-Regulation eliminated control on prices and wages to create free market economy
Deregulation affected: Trucking, Telephone, Natural gas and oil
SEEN AS KEY TOOL TO REDUCE BIG GOVERNMENT
Deregulation
- Reduce what you spend
- Shrink Big Government
- Allow Capitalism to flourish
Executive Order 12288
Control inflation Carter introduced EO to control wage and price
Reagan first thing pass own EO which got rid of Carter’s EO and businesses now free from regulation that regulated wages and prices charged
Believed sort of regulation creating too much interference of government laissez faire approach better for economy
Economic impact= wages and prices not controlled led to higher inflation, Reagan believed long term free market would result in levelling out of wage/prices
Further tax reforms
- TEFRA- Eased ‘double dip’ economy had taken before boom. Closed tax loopholes and introduced enforcement of tax rules and raised taxes on phone/cigarettes’
Balancing the Budget
Appointed a bi-partisan commission to identify what changes should be made
Proposed raising retirement age from 65-67 and taxing social security payments to well off. passed 1983
Reagan increased defence spending 157 bil 1981- 300 bil 1989
Failed to balance federal budget
Because of tax cuts and defence spend deficit 1980= 208 bil. USA become borrowing nation first time
Success of Reaganomics
- Restored faith in presidency returned USA to prosperity with Stagflation gone
- Longest period of peacetime economic growth first economic boom of 1950s presided over by Eisenhower
- 1984 economy strong Reaganomics reduced inflation 13.5% to 4.7%
- Created 7 million new jobs, reduced unemployment by 2%
- Cut tax 750 bil over 5yrs
- Inspired electronics industry and new service industries
Failures of Raegonomics
- Led to sharp rise in interest rates and so deepened recession Reagan inherited
- Some argue Reagan’s taxes made rich richer poor poorer, say new oil sources due to economic recovery
- Deficit reduction borrowing nation
- Deregulation led to businesses taking risks w safety of workers and people’s investments
