The New Outlook of the The New Outlook of the Reagan YearsReagan Years

1981-19881981-1988

Chapter 21Chapter 21

Section 2Section 2

The Farmer’s Dilemma: Feast or The Farmer’s Dilemma: Feast or FamineFamine

Expensive equipment made Expensive equipment made possible gains in productivity possible gains in productivity on large and medium-sized on large and medium-sized farms.farms.

The decline of the small family The decline of the small family farm was closely linked to the farm was closely linked to the mechanization of farms in the mechanization of farms in the 2020thth century. century.

Farmers with small farms, who Farmers with small farms, who could not afford such could not afford such equipment, found that they equipment, found that they could not compete. could not compete.

By 1995 most farm acreage By 1995 most farm acreage was controlled by large was controlled by large agricultural corporations.agricultural corporations.

Farm SubsidiesFarm Subsidies

Ever since the Great Depression, Ever since the Great Depression, the federal government had the federal government had paid subsidies to farmers to paid subsidies to farmers to help them survive years when help them survive years when crops brought low prices.crops brought low prices.

(A subsidy is a grant of money (A subsidy is a grant of money from the government to a from the government to a private enterprise.)private enterprise.)

Feast in the 1970sFeast in the 1970sFarmers are always subject to Farmers are always subject to

sudden changes in the world sudden changes in the world demand for their crops.demand for their crops.

Theirs is a business of either Theirs is a business of either feast (high demand, high feast (high demand, high prices) or famine (low demand, prices) or famine (low demand, low prices).low prices).

The 1970s were largely a boom The 1970s were largely a boom time for American farmers.time for American farmers.

Prices for farm products were high Prices for farm products were high partly because of increased exports partly because of increased exports to the Soviet Union and other to the Soviet Union and other nations.nations.

Encouraged by the federal Encouraged by the federal government, farmers borrowed government, farmers borrowed money to modernize farms and money to modernize farms and increase production.increase production.

They made spectacular gains in They made spectacular gains in productivity.productivity.

In 1972 one American farmer In 1972 one American farmer produced enough to feed 53 people; produced enough to feed 53 people; by 1982 the same farmer could feed by 1982 the same farmer could feed 78 people.78 people.

Famine in the 1980sFamine in the 1980s

Farmers became the victims of their Farmers became the victims of their own success.own success.

When the world demand for their When the world demand for their crops declined, they were left with crops declined, they were left with millions of tons of unsold grain and millions of tons of unsold grain and received low prices for the rest.received low prices for the rest.

Contributing to the lower prices was Contributing to the lower prices was an embargo on the sale of grain to an embargo on the sale of grain to the Soviet Union done by Jimmy the Soviet Union done by Jimmy Carter when Russia invaded Carter when Russia invaded Afghanistan in 1979. Afghanistan in 1979.

Farmers now faced high debts and Farmers now faced high debts and declining income.declining income.

Thousands of family farms went Thousands of family farms went bankrupt.bankrupt.

In order to help farmers, In order to help farmers, President Reagan initiated two President Reagan initiated two programs in the 1980s. programs in the 1980s.

The first program was called The first program was called “Payment in Kind” (PIK).“Payment in Kind” (PIK).

Farmers were paid in surplus Farmers were paid in surplus crops held by the government crops held by the government for not planting on their land.for not planting on their land.

Hoped it would reduce the Hoped it would reduce the oversupply that had led to oversupply that had led to reduced prices for farm reduced prices for farm products.products.

A second program was made part of A second program was made part of the Food Security Act of 1985.the Food Security Act of 1985.

Again, in return for not planting Again, in return for not planting crops on their land, farmers would crops on their land, farmers would receive payments from the receive payments from the government to help protect them government to help protect them from financial loss.from financial loss.

Both federal programs provided aid Both federal programs provided aid to farmers at a difficult time, but to farmers at a difficult time, but increased the federal deficit.increased the federal deficit.

In the 1990s, exports of grain again In the 1990s, exports of grain again helped to increase farm income.helped to increase farm income.

Poverty in an Affluent SocietyPoverty in an Affluent Society

After World War II, most Americans After World War II, most Americans lived comfortably on incomes high lived comfortably on incomes high enough to sustain an affluent, or enough to sustain an affluent, or prosperous, lifestyle.prosperous, lifestyle.

Even so, there was still millions of Even so, there was still millions of Americans who lived in poverty.Americans who lived in poverty.

In the 1980s, increasing numbers of In the 1980s, increasing numbers of homeless people slept in bus homeless people slept in bus terminals and makeshift shelters on terminals and makeshift shelters on the streets of major cities.the streets of major cities.

Increased poverty was Increased poverty was one cause of two other one cause of two other trends: an increase in trends: an increase in the crime rate and an the crime rate and an increase in the school increase in the school dropout rate.dropout rate.

In the 1980s, an In the 1980s, an inexpensive addictive inexpensive addictive drug, crack, worked its drug, crack, worked its way into poor urban way into poor urban neighborhoods.neighborhoods.

Drug use, drug wars, and Drug use, drug wars, and crime made life more crime made life more difficult for millions living difficult for millions living in U.S. cities.in U.S. cities.

In 1981 President Reagan argued In 1981 President Reagan argued that government programs to reduce that government programs to reduce poverty were not the solution but poverty were not the solution but part of the problem.part of the problem.

He believed that financial aid to all He believed that financial aid to all expect the “truly needy” caused the expect the “truly needy” caused the poor to be permanently dependent poor to be permanently dependent on government funds.on government funds.

Many Americans, concerned about Many Americans, concerned about high taxes and budget deficits, high taxes and budget deficits, supported the president’s efforts to supported the president’s efforts to cut back on federal programs for the cut back on federal programs for the increasing numbers of homeless increasing numbers of homeless people.people.

Reagan’s critics blamed his cuts in welfare Reagan’s critics blamed his cuts in welfare programs for the increasing numbers of programs for the increasing numbers of homeless people. homeless people.

But some social scientists argued that the But some social scientists argued that the poor might represent a permanent poor might represent a permanent “underclass” in American society and that “underclass” in American society and that no amount of government aid could no amount of government aid could effectively deal with the program.effectively deal with the program.

The “New” ImmigrantsThe “New” Immigrants

The “new immigrants,” as they The “new immigrants,” as they were called, did not come from were called, did not come from Europe. Europe.

They came instead from Asia and They came instead from Asia and Latin America.Latin America.

At the same time, immigrants At the same time, immigrants from areas of turmoil (the Soviet from areas of turmoil (the Soviet Union, Eastern Europe, and Iran), Union, Eastern Europe, and Iran), as well as immigrants from India as well as immigrants from India and Pakistan added to the large and Pakistan added to the large number of new arrivals. number of new arrivals.

Immigration Act of 1965Immigration Act of 1965

No more than 20,000 from any one No more than 20,000 from any one countrycountry

No more than 120,000 from countries No more than 120,000 from countries of Western Hemisphere (Canada and of Western Hemisphere (Canada and Latin America)Latin America)

No more than 170,000 from countries No more than 170,000 from countries of the Eastern Hemisphere (Asia, of the Eastern Hemisphere (Asia, Africa, Europe, and Australia)Africa, Europe, and Australia)

Preference given to skilled workers Preference given to skilled workers and professionals and to those with and professionals and to those with family ties to U.S. citizens.family ties to U.S. citizens.

Illegal ImmigrantsIllegal Immigrants

In addition to the millions of “new In addition to the millions of “new new immigrants” admitted legally, new immigrants” admitted legally, there were millions of others who there were millions of others who crossed the U.S. Mexican border crossed the U.S. Mexican border illegally.illegally.

Facing high unemployment and Facing high unemployment and poverty in Mexico, they escaped poverty in Mexico, they escaped detection as they waded across the detection as they waded across the shallow Rio Grande.shallow Rio Grande.

U.S. employers were often glad to U.S. employers were often glad to hire them for low wages.hire them for low wages.

U.S. labor unions feared that the illegal U.S. labor unions feared that the illegal Mexican aliens would undercut American Mexican aliens would undercut American workers by taking jobs for less than the workers by taking jobs for less than the minimum wage.minimum wage.

Illegal aliens did not pay taxes, and yet Illegal aliens did not pay taxes, and yet because of their numbers they placed a because of their numbers they placed a strain on city services and added to the strain on city services and added to the cost of city government.cost of city government.

To permit illegal immigration to continue To permit illegal immigration to continue would be unfair to those other would be unfair to those other immigrants who had to wait patiently for immigrants who had to wait patiently for years to gain lawful entry to the United years to gain lawful entry to the United States. States.

Immigrants who took the test to become Immigrants who took the test to become citizens felt that it was unfair for the citizens felt that it was unfair for the illegal immigrants to be living here and illegal immigrants to be living here and not take the citizenship test.not take the citizenship test.

Immigration Reform and Control Immigration Reform and Control Act of 1986Act of 1986

Enacted with President Reagan’s Enacted with President Reagan’s approval, the Immigration Reform approval, the Immigration Reform and Control Act of 1986 placed heavy and Control Act of 1986 placed heavy fines on employers who knowingly fines on employers who knowingly hired illegal aliens.hired illegal aliens.

At the same time, the law permitted At the same time, the law permitted illegal aliens who had entered the illegal aliens who had entered the United States before 1982 to remain United States before 1982 to remain here as legal residents.here as legal residents.

Is illegal immigration still a Is illegal immigration still a problem today in the United problem today in the United

States?States?What can be done to help reduce What can be done to help reduce

the flow of illegal immigrants?the flow of illegal immigrants?

New immigrants contributed to the U.S. New immigrants contributed to the U.S. economy by purchasing goods and economy by purchasing goods and services and paying taxes.services and paying taxes.

They also protect the U.S. from future They also protect the U.S. from future labor shortages, and their diverse cultures labor shortages, and their diverse cultures enrich American society.enrich American society.

Changing Demographic PatternsChanging Demographic Patterns

America’s increasingly elderly America’s increasingly elderly population is politically powerful population is politically powerful because it has a strong because it has a strong commitment to protecting Social commitment to protecting Social Security Organizations such as Security Organizations such as AARP and the Grey Panthers AARP and the Grey Panthers lobby for increased Medicare lobby for increased Medicare benefits and cost-of-living benefits and cost-of-living increases from Social Security.increases from Social Security.

Economically, Economically, the large the large numbers of older numbers of older workers makes workers makes it difficult for it difficult for younger people younger people to find to find employment, employment, except in high-except in high-tech fields like tech fields like computer computer science. science.

In addition, In addition, many baby many baby boomers are boomers are feeling the feeling the double economic double economic burden of burden of sending their sending their children through children through college, while at college, while at the same time the same time caring for elderly caring for elderly parents.parents.