Ronald Reagan Tough Economic Growth Essay

Ronald Reagan: An Era of Steady Economic Growth In a time when there was a lack of jobs, rising inflation, and an energy crisis all affecting the country, there was no doubt that Jimmy Carter, the sitting president at the time, would clearly be challenged by his opponent, Ronald Reagan. Reagan, a former governor of California, was known as a great communicator from his days being a governor. Reagan, who was best known at that time for the time he spent as a Hollywood actor and governor, came from humble roots, born and raised in a small apartment without running water and indoor plumbing. Later on, Reagan attended Eureka College in Illinois. As an active member of the school, Reagan was the president of the student council, and also played

One of the main tactics of Reagan’s tax plan was to cut taxes, which he believed would increase spending from American citizens. This increased spending, he believed would have ripple effects to the success of shop owners and manufacturers alike, “trickling down” in the creation of new jobs. The Keynesian economic theory claims that when there is a low unemployment rate with a good amount of well-paying jobs, Americans will spend money, directly causing the economy to improve. The Keynesian economic theory was a strong belief of Ronald Reagan as he slashed taxes during his time as president. Although 10.4% were unemployed in January of 1983, the unemployment rate quickly decreased to 8% in January of 1984. Eventually, the unemployment rate fell to 5.4% right before Reagan left the White House in 1989 (bls.gov). Reagan’s belief in trickle down economics was quite evident in 1986, when he cut taxes for the wealthy from 50% to 28%, while raising taxes of the lowest earners from 11% to 15%. The idea of trickle down economics stated that heavily reduced taxes for the rich would “trickle down” and ultimately help the lower class. This economic policy was almost the polar opposite compared to what many former democratic presidents had pushed in their agendas. As a result, Reagan’s economic plan was completely different compared to the president that came before him, Jimmy

The recession of 1982 when his first term began was a time when a large portion of Americans were unemployed, creating the need for Reagan to do something. Although high taxes and a great deal of government intervention from FDR was a solid way to get the United States out of the Great Depression, Reagan wanted to try the exact opposite. Reagan’s philosophy was simple: cut taxes to allow small businesses in particular to create more jobs, decrease the unemployment rate, and allow citizens to improve the economy by spending money (history.com). Fortunately for the United States, the unemployment rate slowly decreased, and was nearly cut in half before Reagan left office (bls.gov). Despite the recession during 1981, the economy turned around within a couple of years. “By 1983, the nation’s economy had started to recover and enter a period of prosperity that would extend through the rest of Reagan’s presidency” (history.com). Though starting gradually, the period of prosperity mentioned in the quotation allowed Reagan’s economic policy to be viewed as a positive change for the country by