The 1980s economic policies put in place by President Ronald Reagan are referred to as Reaganomics. This prioritized raising military spending, lowering taxes, and simplifying government regulations. Reaganomics' proponents contend that because it increased economic growth and decreased inflation, it was advantageous for the US. It was thought that lowering taxes, particularly for the wealthy, would encourage investment and eventually strengthen the economy as a whole. Furthermore, it was believed that the focus on deregulation would encourage innovation and competitiveness in the free market.
In Scott Kings’ speech he perfectly describes the negative effects of Reaganomics. The effect that it had on low income families was not the only consequence. The national debt increased by 188%, which is something that continues to affect the United States (ProCon.org 1981-2009). Though there was a change in American economics, the only ones that truly profited from Reaganomics were the rich. The people in low income homes were either negatively impacted or their quality of life stays the same.
America knew that something had to change. “A competitive America—let alone a compassionate America—will need every trained mind and every pair of skilled hands.” Reagan's New Federalism marked a concrete shift from the Great Society programs of the 1960s and 1970s, which targeted minority groups that were struggling. Almost everybody was on board with this plan and contributed to the help, showing us that America is coming together, for the most part. Ronald Reagan's economic policies initially proved less successful than its partisans had hoped, the only reason was that they couldn't balance the budget correctly.
In Kevin Phillips' novel The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath, the author dissects the economic and political impacts of the post Reagan era. The book mainly focuses on the economic changes that occurred in the 1980s. It was during this time that there was major political and economic growth for the United States, but this change was mostly seen in the rich upper class. An overarching theme of this period is the rich becoming richer. Phillips dives into the various issues that occurred during and as a result of such a large economic boom and its aftermath.
When president Reagan entered the oval office in 1981, his first priority was to stimulate economic growth for generations to come. Reagan’s plan consisted of four economic pillars, they are as follows: to reduce the growth of government spending, to reduce the marginal tax rates on income from both labor and capital, reduce regulation, and to reduce inflation by controlling the money supply (Niskanen, 2002). Reagan’s policies created an economic boom during 1983, however, it is argued that Reagan’s policies increased the national debt for years to come and widened the gap between the rich and the poor (ushistory.org, 2016). Reagan helped America escape the stagflation it faced through most of the 1970’s through four major policy changes (Niskanen,
Trickle-down economics and supply-side policies fall under an umbrella term known as ‘Reaganomics.’ Reaganomics is a term used to refer to the policies and theories of Ronald Reagan, the 40th President of the United States of America. These theories and policies hold the belief that a decrease in taxes would drive economic growth. As Reagan began his first term in office, the country went through several years of high inflation and high unemployment. To combat this, Reagan proposed a set of policies to reduce inflation and stimulate economic and job growth with one of them being reducing taxes for individuals, businesses and investments (Kenton, 2022).
Supply-side economics or more commonly known as “Reaganomics” was a plan put in place to fight an economy facing a stagnant growth and high inflation. The theory states that a surplus supply of labor, money and, goods creates demand and can increase a failing economy. It also involves lowering tax rates and deregulation to increase growth in the economy, however; through Reagan’s presidency there was another common economic plan that countered supply-side economics, Keynesian theory. This theory stated that demand is the main force behind an economy, not supply. Reagan implemented supply-side economics in the 1980s’ by cutting the top income tax rate from 70% to 28% and corporate tax was lowered from 46% to 40%.
The results of Reaganomics were both negative and positive. On the positive side of the spectrum, Reaganomics can be thanked for the encouragement of entrepreneurship and innovation. Reagan’s first term of presidency witnessed the rise of the information revolution with technological breakthroughs such as IBM’s very first personal computer as well as the launch of major tech industries thus causing a major historical turning point. Companies who we all know and use today, such as Dell, Microsoft, Intel, Sun Microsystems, Compaq, and Cisco Systems, all rose during this time period and began to transform the world into the technologically advanced system it is today. Economically, these companies have changed America as they continue to pump
• Before Ronald Reagan started his presidency the US economy wasn’t performing very well, serious attempts by Congress were made to reduce the growth of federal spending and to move away from persisting the budget deficit. In 1980 a combination of near record inflation, high unemployment, lower productivity, and record high interest rates injured the economy. • Reagan reduced the individual income tax rate from 70% to 28% and corporate income tax rate from 48% to 34%. Individual tax brackets were filed for inflation while most of those in the low income households were relieved from the individual income tax. These actions were slightly counterbalanced by several tax increases and in Social Security tax rates.
The White House had offices for domestic policy that were created during Presidents Nixon, Ford and Carter’s stay. President Reagan expanded these offices to exercise more control (Schultz, 2013). The Domestic Policy group was renamed to the Office of Policy Development (OPD), and an organizational relationship between the White House and the departments was set in place to make sure that the programs were on the same page as the presidential goals. Cabinet councils were created to meet at the White House and discuss goals and objectives. Reagan signed the Tax Reform Law (Reagan Library, n.d.).
Reagannomics refers to the economic policies of President Ronald Reagan during his two-term presidency from 1981-1989. These policies are often a topic of debate among economists and politicians alike. For starters, it closely resembles trickle-down economics, which is a widely controversial economic theory. It suggests that giving tax breaks or other economic benefits to the richest people or businesses will encourage them to reinvest the money in the economy, resulting in job creation and economic growth that will eventually "trickle down" to benefit everyone in society. While Reagan’s policies were consistent with trickle-down economics, he never used the term.
Edward McClelland is a journalist and the author of several books. In this particular article Mr. McClelland explores the decline of the middle-class. McClelland remembers the 1970’s as an era of blue-collar aristocrats and “The Decade That Taste Forgot” (550). “Although this all began to change in the 80’s” (550). “I know I am dating myself by writing this, but I remember a middle class.”
In conclusion, economics systems have varied throughout history, with each containing different benefits that allow for prosperity among the economy. The common trend of economic resurgence after an economic crisis is prevalent throughout history. In fact, the various changes in economic schemes within the past hundred years is quite interesting to say the least. With the effective plan and execution, the United States can reform its system and head towards another great economic boom surpassing even the Golden Age of Economics or Reaganomics. The history behind the various economic systems is logically provoking as one must assess the various goals in which an economy has, as well as the most optimal way of achieving them.
There is lower, middle, and upper class, but there are also subcategories that fill the gaps in between, like the impoverished and the top one percenters. “Class in America”, written by Gregory Mantsios, addresses the myths and realities about socioeconomic class in America and how they affect American lives. His article highlights the unequal divide that has persisted over the course of history and will continue to manifest in the future. To introduce the existence of this issue, Mantsios states that this country’s citizens “don’t like to talk about class...or class privileges, or class oppression, or the class nature of society” (Mantsios 378). This is the case in America today because people are neglecting to acknowledge the existence of these elusive
Supply side economics later coined and also known as Reaganomics due to its use by the president is a theory, which is opposite of the Keyesian theory and states that the supply of goods, money and labor is what creates demand in an economy. Unlike its opposing theory, which states that all demand creates a driving force of economic empowerment, the Supply Side Economic theory is better known for its trickle down effect. For example, the government under this theory gives a tax cut to a business, now that business can invest this newfound capital increase, hire more workers or produce more goods. Regardless of the businesses choice they fuel the economy. Hiring more workers allows businesses to charge higher prices for their goods, but as
