The Extent to which 'Big Government' was Reduced.

Question 1

How was ‘Big Government’ reduction seen as beneficial?

Answer 1

• There would be less federal interference in state and local affairs, business, finance and all aspects of people’s lives.

Question 2

How could ‘Big Government’ reduction be interpreted as not beneficial?

Answer 2

• Less funding for state and local government projects.
• Less regulation of business expansionism and greed.
• Less control over foreign imports.
• Less social welfare for the needy.

Question 3

How many pages were removed from the Federal Register?

Answer 3

• 23,000 pages.

Question 4

How was ‘Big Government’ reduced in the short term?

Answer 4

• Helped bring down cost of petrol and heating fuel by deregulation.
• Replaced federal agencies with private sector ones and federal employees with volunteers.

Question 5

How much had been saved due to a strike force being setup to combat government fraud and waste?

Answer 5

• Saved $2 billion in 6 months.

Question 6

What was significant about Reagan’s media presence?

Answer 6

• Used everyday images when discussing change.
• Small-scale savings were more real to the public than just off $2 billion.
• Discussed deregulation as if it was something he instigated (Carter started it - deregulating the airlines and drafted bills on deregulating trucking, the rail ways and some areas of finance.)

Question 7

What problems arose from deregulation?

Answer 7

• When smaller companies were struggling, big companies could, and did buy them out.
• During the 80s big companies expanded while small, independent businesses struggled.
• Rise in conglomerates.
• Businesses set their own standards of safety and set them lower than government regulations.
• Initially deregulation brought lower prices through competition.
• Many businesses cut services in order to maximise profit.

Question 8

What were the effects of the policies on trade?

NEGATIVES

Answer 8

• Buying power of dollar weakened meaning foreign imports became cheaper and imports rose.
• American companies lost business.
• Some political economists said that foreign products were damaging the economy. Also suggested the USA was a global borrower as opposed to ‘the worlds banker’.
• American companies were being bought up by foreign companies.

Question 9

What were the effects of the policies on trade?

POSITIVES

Answer 9

• Rise of foreign imports was a good thing as people had more choice.
• Foreign imports made the USA an attractive place for other countries to trade and invest with.
• Rising levels of Japanese investment (ignores the fact that many Japanese re-invested their profits made in the USA back into Japan).

Question 10

Was Big Government reduced?

SUCCESSES

Answer 10

• Initially lower prices due to increased competition.
• More choice due to increased foreign imports.
• Increased trade and investments from foreign countries.
• High interest rates on savings.
• Few regulations passed by the government (shows deregulation has happened).

Question 11

Was Big Government reduced?

FAILURES

Answer 11

• Rise in conglomerates led to decreased competition due to monopolisation.
• Services cut to maximise profit.
• Increase in risky investments to keep up with banks.
• Bush forced to pass FIRREA in 1989 to try and save America from the Savings and Loans Crisis.
• Foreign imports become cheaper.
• Foreign profits were not invested in America.
• Congress blocked deregulation of environmental issues (Congress isn’t fully supportive of Reagan and his ideas).
• Local governments unwilling to takeover.
• Previously federally funded agencies collapsed.
• Prices increased in the long term.
• Interest rates increased on loans.

Question 12

Between 1980 and 1985, how many textile plants were closed?

Answer 12

• 250 textile plants were forced to close.

- Over 300,000 workers lost their jobs.

Question 13

How much was the cost of George Bush’s 1989 FIRREA Act?

Answer 13

• $150 billlion.