Reagan Flashcards
Who were the Republican Party for?
Big business
What was a problem that Reagan had with the current tax system?
Too complicated, full of loopholes, helped industries at the expense of others, voters and big business feared it would lead to tax increase
What were the purposes of the Tax Reform Act 1986
- stop inflation
- reduce unemployment
- increase personal wealth
- increase productivity
- encourage personal saving and investing
- reduce federal spending and defecit
Some reasons Reagan did not want to (or could not) completely get rid of the welfare system
- Congress wanted to keep some domestic programmes
- Polls revealed people did not want to reduce Social Security or Medicare
- American consumers preferred cheap imported goods
How did Reagan respond to Trade Deficit 1981?
- persuade Japanese manufacturers to limit exports to US
- Japanese opened manufacturing plants employing Americans in US
- 25% tariff on imported goods
- 3% tariff on imported cars
What happened to Trade Deficit under Reagan?
rise from $38 billion (1982) to over $150 billion each year in second half of decade
How did Reagan see deregulation? As a way to…
As a way to:
- cut expenditure
- decrease the size of ‘big government’
- allow unfettered capitalism to flourish
Total percentage of cutbacks in staff of regulatory agencies
29%
What happened to Social Security payments?
bipartisan investigatory commission recommended:
- raising retirement age from 65 years to 67 years by 2027
- taxing social security benefits paid to the well-off
- delaying cost of living increases
1983 these proposals became law
What happened to Defence Expenditure under Reagan? What happened to the federal budget deficit because of this? What act were Congress forced to pass? (BBaEDCA)
- increased $157.5 billion in 1981 to $303.6 billion in 1989
- federal budget deficit soared
- Congress forced to pass Balanced Budget and Emergency Deficits Control Act 1985, enforced spending cuts
What were Reagan’s aims as stated in State of Union Address 1981?
- tax cuts to revive the economy
- reduce the size of big government
- deregulation of state and federal government
- build up America’s Cold War defences
What was Reagan’s economic philosophy known as?
Reaganomics
1981 Budget - how many cuts to federal programmes?
212
Name of Act that cut taxes in 1981
Economic Recovery Tax Act 1981
Why did Congress get on well with Reagan? Why was he popular?
- tougher than Carter, Ford or Nixon
- handled Congress well
- cultivated many swing voters in House
- increased pressure on congressmen by targeting districts through radio and TV
- poll ratings were high due to assassination attempt
- ‘great communicator’
What happened when 12,000 air traffic controllers went on strike despite this not being allowed in their contract?
Reagan had them all fired, called in military to do their jobs, until replacement could be trained
Why were many worse off during Reagan years?
- ‘revenue enhancements’ hit the less wealthy hard
- cuts in federal programmes hurt single mothers with children
- only 50% of American families maintained their standard of living in the 1980s
Why was life hard for many workers in the Reagan years?
- opposed minimum wage
- hostile to labour unions
- judiciary made it harder for women, minorities, the elderly and disabled to sue employment over discrimination
- deregulation made poor worker safety measures
- Occupational Safety and Health Administration invariably decided for business and against labour
What happened to national debt under Reagan?
What happened to federal expenditure under Reagan?
Where did Reagan borrow money from?
- Federal expenditure rose $699.1 billion (1980) - $859.3 billion (1987)
- Reagan financed his tax cuts and weapons purchases with money borrowed from Japan and Germany
- National debt tripled to more than $2.6 trillion
What was unemployment in Reagan’s first 2 years?
10%
What was inflation in Reagan’s first 2 years?
in double figures
What happened to businesses in Reagan’s first 2 years?
they crashed
What happened to the number of homeless in Reagan’s first 2 years?
increased
Why was their economic growth under Reagan?
- tight money policies at Federal Reserve Board
- new oil source discoveries
- massive defence expenditure, prosperity to US
