Reaganomics :( Flashcards
inflation between 1980 and 1989
1980- 13.5%
1989- 4.7%
unemployment between 1980 and 1989
1980- 7%
1989- 5.2%
but in 1984 it was 11%
what was reaganomics
trickle down economics
cutting taxes and federal spending will improve the economy/ if you let businesses do their own thing the economy will improve
Tax the rich so they pay their employees “more”, this effects welfare programmes and means the rich get richer.
pro of Reaganomics
recovery from stagflation
cons of reagnonmics
defecits in trade
larger national debt
the four pillars of Reaganomics
-reduce federal income and capital gains taxes
-reduce federal spending
-reduce government regulation
-tighten the money supply to reduce inflation (monetarism)
debt from 1980 to 1989
1980- $1 trillion
1989- $2.6 trillion
trade defecit 1980 to 1989
1980- $74 billion
1989- $221 billion
government spenidn 1980-1989
1980- $699.1 billion
1989- $859.3 billion
stagflation
prices rising and unemployment is high
trickle down theory
cut business taxes so they can use the extra money to hire more workers
At the height of his career, Reagan was paying what % of his income in federal and state taxes?
90%
what did Reagan say about defence
“it was not a budget item”
How many airtraffic controllers did Reagan fire when they went on strike
12,000
where did Reagan want cuts in
taxation
federal government
welfare payments
what did Reagan believe in
supply-side economics, which is economic growth through low taxation and low gov. regulation
what were Reagans policies
pro business and anti-labour
how was reagan pro business and anti labour
-opposed minimum wage and interfered with cingressional attempts to change it (this widened the class gap)
-openly hostile to unions, he fire 12,000 air traffic controllers who went on strike, after that there were fewer strikes
-he appointed over 400 conservatives to the judicary and their rulings made it more difficult for women and minorities to sue employers over discrimination
other than economic, what other regulations did he cut
enviromental
38% of the consumer product safety comission, meaning consumers weren’r guranteed safety
despite his promise of cutting federal expenditure, where did Reagan increase it
defence, as it wasnt a budget item,
despite this even non defense expenditure increased
what was congress forced to pass in 1985
Balanced Budget and Emergency Defecits Control Act 1985
why were congress forced to pass the Balnced Budget and Emergency Deficits Control Act in 1985
the budget deficit was over 5x that of his predeccesors
why did the USA remain a world economic giant
it had 5% of the worlds population and by 1990 it produced 25% of the worlds goods
how did Reagan finance his expenditure
with loans from Germany and Japan
even joking “im not worried about the trade deficit its big enough to take care of itself”
other than reagans failings, what else caused economic problems
-most americans did not want a reduction on social programmes
-consumers preffered cheap, imported goods.
what changed with America in the 80s in the terms of credit
it went from the world largest credit nation to the worlds largest debtor nation
how much more did america spend on imported goods than foriegners spent on us goods
$2 billion
What programmes did Reagan keep away from the cuts
social security, medicare
why didnt reagan cut medicare or social security
it would be political suicide as he would lose influnetial grey votes
how many federal programmes did Reagan reduce the budget of in 1981
212 like the child nutrition programme.
ADFDC
Aid to Dependent Families with Dependent Children, which was cut. This effected mainly black and single mothers. This was partially due to the conservative belief of single mothers being responsible for the break down of the traditional family
wage/class gap
it increased due to things like miniumum wage opposition
the share of national income for the wealthiest 1% rose from 8% to 15% (the rich get richer)
avergae household income
$1,300
amount of homeless people
200,000 to 400,000
which years were particulary bad for families and workers
1981-83
why was 1981 to 83 particulary bad for workers and familys
double digit inflation
10% unemployment (around 50% in the rust belt)
Avergae family income
plummeted under reagan, recovering in 1987 but only to 1973 levels
how many families maintained their standard of living
only 50%
often only acheieved by both parents working
why was Bush elected
-he was a loyal VP to reagan
-reagan endorsed him
-a promise of “no new taxes”
why was Bush contradictory
he ran a promise of no new taxes, and a decrease in the defecit.
As soon as he was elcted he went back on this, with new taxes
who did Bush run against in 1988
Michael Dukakis
who beat Bush in 1992
Clinton
why was Bush’s decision to raise taxes significant
-signalled belief that the federa; governemnt had spent beyond its means, as he did nothing to help incomes
-demonstrated the difficulties of a democratic nation living beyond its means.
-showed politicians looking for votes made promises they could not keep
-Bush failed to promote the conservative social agenda so the republicans interfered with his reelection
