Forums → WEPR → Ronald Reagan

I will post what it says in my book, and I want you guys to post what you think about it.

Deregulation

As part of his promise to reduce government and "get the government off the backs of the American people," President Reagan pursued a policy of deregulation. This meant cutting the rules and regulations government agencies placed on businesses. Under President Reagan, for example, the Department of Transportation wrote new rules for automobile exhaust systems and safety measures that were easier for car manufacturers to meet.

Reaganomics

Deregulation and his court appointments showed President Reagan's commitment to a conservative view of government. It was his economic policies, however, that formed the core of the "Reagan Revolution." Reagan believed that lower taxes would allow individuals and corporations to invest in new businesses. Because a tax cut would mean less income, Reagan also called for less government spending. Supporters called Reagan's economic policy supply-side economics because it proposed to stimulate the economy by increasing the supply of goods and services. The president's critics ridiculed the policy as "Reaganomics."

In 1981 Congress lowered taxes and slashed nearly $40 billion from federal programs such as school lunches, student aid, welfare, low-income housing, and food stamps. Critics charged that these cuts hurt both the working poor and unemployed people. Supporters argued that Reaganomics would boost the economy, helping everybody in the long run.

While Reagan cut domestic programs, he pushed for sharp increases in military spending. The president declared that the Soviet threat made it necessary to build up the military.

Government Debt

With higher defense spending and lower taxes, the government spent more money than it collected in revenue. It had to borrow money to make up the difference. This borrowing increased the federal debtâ"the amount of money owed by the government. Between 1970 and 1980, the federal debt had grown from $381 to $909 billion. By 1990 the debt had jumped to $3.2 trillion.

Recession and Recovery

President Reagan's new economic policies seemed to falter when a serious recession began early in his first term. However, the economy recovered a year later and began to boom.

In 1983 the economy began a long, steady rise. Businesses expanded, and the high jobless rate of 1982 declined. Investors showed confidence in the economy with a boom in stock trading.



The federal debt continued to grow as well. In 1985 Congress tried to halt growth of the debt by passing the Gramm-Rudman-Hollings Act. The act set a series of targets for eliminating the federal budget deficit by 1991. If Congress and the president could not agree on voluntary spending cuts, the law called for automatic spending cuts to balance the budget. The provision for automatic cuts did not apply to all areas of the budget, however, so it had limited success.