Big government

• Explain why the reduction of ‘big government’ was beneficial?

  • business to thrive in ‘laissez faire’
  • Clean break from scandals in poor
  • media portrayal of government in the 1970s
• How was big government reduced in the short-term?

  Cut 23,000 pages from federal register

  Brings down costs of oil

  Federal anti-strike taskforce

  Replaced federal agencies with private sector/volunteers.
• Explain the causes of the Savings and Loan collapse

  Deregulation allows for risky investments

  Competition between banks of all sizes

  Savings and Loans institutions were small local banks, more at risk
• What were the consequences of the S&L collapse?

  $10 billion lost by S&L collapse

  Many failed through incompetence

  Housing market collapsed/government bailouts totaled more than $150billion.
• Explain the problems created by deregulation

  Smaller businesses cannot compete and fail or were taken over

  Businesses set their own standards for health and safety, physical and

  financial

  Did lead to lower prices but the range of goods and services available goes down

  Prices were fixed by major companies and consumers do not benefit
• To what extent was ‘big government’ ultimately reduced?

  In the short-term perhaps, but savings were minimal

  Congress and fellow Republicans blocked some plans (environment)

  In long-term people less keen due to S&L crisis
• What were the effects of Reagan’s policies on trade?

  Negative; America became a bigger importer than exporter

  Textiles industry lost 250 plants and 300,000 people workers lost their

  jobs

  America becomes a bigger borrower and no longer seen as ‘the world’s

  banker’

  Some argued it created a wider range of affordable goods