RONALD REAGAN

Eric Anderson & Kenya Flores

Thesis

The most significant achievement of the Reagan Administration was Reaganomics because of tax cuts, deregulation, and domestic spending restraint helped to fuel an economic boom that lasted two decades.

OverviewRonald Reagan, originally an American actor and politician, became the 40th

President of the United States serving from 1981 to 1989. His term saw a restoration of prosperity at home, with the goal of achieving "peace through strength" abroad. He revered as one of the best modern day Presidents..

Background● Born on February 6, 1911, in Tampico, Illinois to John Edward

"Jack" Reagan and Nellie Wilson Reagan. ● Father nicknamed him "Dutch," saying he resembled "a fat

little Dutchman."● In college he majored in economics and sociology

Movie Star● In 1937, while covering the Chicago Cubs spring

training, Reagan did a screen test for the Warner Bros.™ movie studio.

● Debuted in “Love is on the Air”● Over the next 30 years, he appeared in more

than 50 movies.

Beginning of Political Journey● Reagan was twice elected as President of the Screen Actors Guild, where

he tried to root out Communist influence. ● In the 1950s he was a spokesman for General Electric. ● Having been a lifelong Democrat, his views changed, and he switched to

the Republican Party in 1962.

Beginning of Political Journey Cont.

● In 1964, Reagan's speech, "A Time for Choosing", in support of Barry Goldwater's presidential campaign, earned him national attention. ○ Building a network of supporters, he was elected governor of

California in 1966. ○ As governor, Reagan turned a state budget deficit to a

surplus, ordered National Guard troops in during a period of protest movements in 1969, and was re-elected in 1970.

○ He twice ran unsuccessfully for the Republican nominations in 1968 and 1976; four years later, he would win the nomination outright, going on to be elected the oldest President, defeating incumbent Jimmy Carter in 1980.

Assassination Attempt● The attempted assassination of Ronald Reagan occurred on

March 30, 1981, 69 days into his presidency. ● While leaving a speaking engagement at the Washington Hilton

Hotel in Washington, D.C., President Reagan and three others were shot and wounded by John Hinckley, Jr.

● The most seriously wounded victim,James Brady, died decades later of complications related to his injuries. Brady's death was subsequently ruled a homicide.

Assassination Attempt Cont.● Ronald Reagan was shot in the chest and in the lower right arm. ● He suffered a punctured lung and heavy internal bleeding, but

prompt medical attention allowed him to recover quickly. ● No formal invocation of presidential succession took place,

although Secretary of State Alexander Haig controversially stated that he was "in control here" while Vice President George H. W. Bush returned to Washington.

Presidency● Entering the Presidency in 1981, Reagan implemented sweeping new political and

economic initiatives. ● His supply-side economic policies, dubbed "Reaganomics", advocated tax rate

reduction to spur economic growth, control of the money supply to curb inflation, economic deregulation, and reduced government spending.

● In his first term he survived an assassination attempt, escalated the War on Drugs, and fought public-sector labor.

● Reagan did enact cuts in domestic spending, military spending increased federal outlays overall, even after adjustment for inflation.

Reagan Revolution● Reagan's presidency was termed the

"Reagan Revolution," in recognition of the political realignment in the U.S. in favor of conservative domestic and foreign policies.

● The Reagan administration took a directly anti-communist stance towards the Soviet Union, actively seeking a collapse of the USSR as well as an end to the Cold War.

● Aimed to reinvigorate the American people

● Plan was to reduce their reliance upon the government

Reaganomics

● 4 Pillars of Policy○ Reduce marginal tax rates on income from labor and capital

○ Reduce regulation

○ Tighten the money supply to reduce inflation

○ Reduce the growth of government spending

Reaganomics Cont.● By reducing or eliminating decades-long social programs, while at

the same time lowering taxes and marginal tax rates, Reagan's approach to handling the economy marked a significant departure from that of many of his predecessor's Keynesian policies.

● Milton Friedman, who was a monetarist economist, was an intellectual architect of free-market policies, and was a primary influence on Reagan.

Why Reaganomics was a Success

Economist Stephen Moore stated in the Cato analysis, "No act in the last quarter century had a more profound impact on the U.S. economy of the eighties and nineties than the Reagan tax cut of 1981." He argued that Reagan's tax cuts, combined with an emphasis on federal monetary policy, deregulation, and expansion of free trade created a sustained economic expansion, the greatest American sustained wave of prosperity ever.

Why Reaganomics was a Success Cont.

He also claims that the American economy grew by more than a third in size, producing a $15 trillion increase in American wealth. Consumer and investor confidence soared. Cutting federal income taxes, cutting the U.S. government spending budget, cutting useless programs, scaling down the government workforce, maintaining low interest rates, and keeping a watchful inflation hedge on the monetary supply was Ronald Reagan's formula for a successful economic turnaround.

Why Reaganomics was a Failure● The full Reaganomics program was not only tax cuts for the rich

and corporations, it included union busting and social spending cuts.

● Social spending cuts were meant to offset the reduction in revenue created by the tax cuts, a just mean leverage of the lack of representation for the poor which actually shrunk the economy.

● Union busting was presumably meant to cut costs for business and create more capital that could then drive economic growth. But capital on it's own can't drive growth.

● In order to have economic growth, the public has to be able to spend on products other than sustenance and shelter.

Failure Cont.● Reducing wages of union workers dragged down the wages of

non-union workers and shrunk the economy into which capital wanted to sell product. It was an unforced error in economic policy that still has ideological support after thirty years of U.S. economic travail.

● Reaganomics was logically unsupportable and is historically and mathematically discredited, yet the right doubled and now wants to triple down on that philosophy as sound policy.

● The only logical conclusion to take away from Reaganomics' current level of public support is that greed trumps reason and history by such a degree as to blind us all to the future

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