To What Extent Was Big Govt Reduced Under Reagan?

Question 1

Reduction of big govt (5)

Answer 1

1) cut federal regulations almost in half
2) helped to bring down cost of petrol and heating fuel by deregulation in 1981
3) replaced federal agencies with private sector ones and federal employees with volunteers
4) 1981 executive order to stop wage and price reg
5) deregulated savings & loans institutions

Question 2

Deregulation

Answer 2

Seen as key tool in reducing big govt

State of Union address in 1982: claims success

Question 3

Problems of deregulation

Answer 3

Big companies bought out smaller
Set own standards of safety (physical and financial) and set lower than Gov’t
Businesses ‘fixed’ high price standards
Cut services on phone companies and air lines to maximise profits- mostly rural

Question 4

Trade unions

Answer 4

Not intervening to impact stock/ trade markets

Question 5

Results of not intervening with trade unions

Answer 5

Balance of world trade against USA as buying power of $ weakened
Foreign imports became cheaper, imports of foreign goods rose
American companies bought by foreign ones- Japanese invest, more choice

Question 6

Political economist view of trade union action

Answer 6

Cheaper, foreign goods were damaging and US was global burrowed for the first time, instead of ‘worlds banker’ (1920s term)

Question 7

Savings and loans

Answer 7

Previously dealt with mortgages and business loans
High interest rates not beneficial to those with LT loans (eg farming)
More speculation and lending money to those who couldn’t pay back
$15 billion dollars of loans
Property market crashed