USA Reagan

• Reagan was born into a relatively poor family in smalltown Illinois in 1911
• After graduating college, Reagan worked as a sportscaster, building a great ability to connect with an audience
• In 1937, Reagan broke into Hollywood after inventing an acting CV and went on to act in 50 movies
• Reagan was voted leader of the actors union
• Reagan had a prime time TV program, General Electric Theatre, and would tour General Electric plants giving speeches to employees
• Reagan's speeches were incredibly popular but became too anti-government and controversial, leading to GE dropping him
• Reagan gained valuable experience by the time he started running for political office
• California was the country's most populous state with the highest GNP during Reagan's time as Governor
• Reagan believed there was too much taxation, bureaucracy, centralised government, welfare, crime, and protests
• Reagan was initially gaffe-prone but learned quickly from mistakes and became adept at politics
• Reagan failed in bids for the Republican nomination in 1968 and 1976 but won it in 1980
• Reagan was more relaxed and moralistic than Jimmy Carter and a very effective public speaker
• Reagan seemed optimistic and had a clear program to change the country, his victory owed much to Carter’s perceived failures during the 1970s
• Reagan's campaign involved big promises and asking Americans if they were better off than 4 years ago
• Reagan aimed to reduce "big government", reduce powers of unions, lower personal and business tax rates, encourage financial speculation, and promote rugged individualism
• Reagan believed in "trickle-down economics" to ensure the wealthy spend and cash flows down
• People had lost faith in the government during Carter's time, Reagan's ideas were more optimistic and less socialist
• Reagan had significant support from a strongly Conservative Christian right, anti-homosexuality, and anti-abortion
• Reagan's government was less conservative than some had hoped, he did not enforce his more extreme political beliefs through Congress
• Reagan revolution


  Much debated idea that Reagan's Presidency led to the triumph of political and/or economic and/or social conservatism after years of general acceptance of liberalism
• Reaganomics


  Economic philosophy emphasizing low taxes and deregulation to stimulate the economy
• Stagflation


  Slow economic growth with high unemployment and rising prices
• Supply side economics


  Focusing on the supply rather than the demand in the economy, aiming for inflation-free economic growth
• Reagan's aims


  • Tax cuts to encourage work and spending
  • Reduce size and role of government
  • Deregulation to liberate business
  • Build up Cold War defences
• Immediate actions after becoming President

  1. Fired White House staff

  2. Put federal gov. hiring on freeze

  3. Froze buying of new furnishings/equipment

  4. Cut travel expenses by 15%

  5. Set up new advisory groups through executive orders
• Reagan's actions made him look very active but had limited real impact
• Reagan's programme for economic reform

  1. Aimed to reduce federal deficit from 22% of GNP in 1981 to 19% in 1986

  2. Cuts made to 212 federal programs

  3. Included personal and business tax reductions

  4. Deregulation to remove federal control in industry

  5. Planned control of money supply to keep inflation down while expanding the economy
• Deregulation

  1. Cut expenditure

  2. Decrease size of 'big government'

  3. Allow capitalism to flourish
• Cutback staff at regulation agencies, averaged 29% overall
• 38% cutback at the consumer product safety commission
• Used his office to make sure government bodies made decisions in favour of business and against workers
• Balancing the budget

  1. Desperately wanted to cut expenditure, suggested cuts to benefits for early retirees caused widespread opposition

  2. Increased retirement age from 65-67, taxed Social Security payments for the well off and delayed cost of living increases in 1982/83

  3. Dramatically increased defence spending from $157.5 billion in 1981 to $303.6 billion in 1989, causing the deficit to soar

  4. Congress had to pass the Balanced Budget and Emergency Deficit Control Act in 1985 to enforce more spending cuts
• Tax Reform


  1. ERTA cut tax rates by 23% and lowered rates for top tax bands from 70%-50%, allowed untaxed IRAs. Business tax rates were reduced

  2. Introduced the Tax Reform Act in 1986 to make tax simpler. Gave breaks to small business but tightened loopholes for big corporations

  3. Reduction of tax rates for very wealthy ensured it maintained enough Republican support
• Economic growth


  1. In the first 2 years, unemployment was 10% and inflation stayed in double figures. Businesses crashed and homelessness increased

  2. Reagan stuck with belief in supply side economics and prosperity did return, but not necessarily because of SSE

  3. Carter appointed Paul Volker at the Federal Reserve Board kept tight restrictions on money supply

  4. Discovery of new oil sources reduced oil prices (Alaskan production as well as smaller OPEC countries like Brazil, India and Malaysia)

  5. Defence spending brought prosperity to regions with defence and aerospace industries

  6. After the early recession, the Reagan era saw the longest period of economic growth in peacetime that America had ever seen, leaving a favourable impression
• Reagan’s economic policies had an adverse impact on some Americans and were damaging for long-term prospects for the US economy
• Initial tax cuts were followed by “revenue enhancements” (tax rises) that hit the less wealthy harder. Cuts in federal programmes hit single mothers and their children
• Average family income fell. By 1987 it had only recovered to 1973 levels. Only half of American families maintained their standard of living in the 1980s, usually if both parents worked
• Reagan opposed the minimum wage and was hostile to labour unions
• “no strike” clause inserted into federal workers contracts. 12,000 air traffic controllers ignored this, so he fired them all and used the military to do their jobs until replacements could be trained
• Conservative judicial appointments made it harder to sue employers over employment discrimination. Deregulation reduced levels of worker safety