Reagan Analysis Paper

Reagan Analysis Paper

Michael Wang

HIS/145

August 15, 2014

Jennifer Moore

Reagan Analysis Paper

President Ronald Reagan was the 40th President of the United States and one of the most notable in history. He is credited with bringing about the end of the cold war, and restoring a national sense of pride. Reagan’s Approval ratings were 53 per cent at the end of his two term and as people look back those numbers have gotten higher. Even the Iran Contra scandal did little to tarnish America’s opinion of the president. During his presidency, he also implemented a new economic system called side-line economics which was a very large deviation from previous Keynesian economics. Many government programs budgets were reduced during Reagan’s presidency in order to promote growth in the economy. There were some good parts and bad parts of Reagan’s presidency but overall I believe that it was somewhat underrated.

In the latter half of the 1970s the economy was mired in “stagflation”, low growth coupled with high inflation rates as well. It was a top priority during the Reagan presidential campaign to promote growth in the economy. American economic policies derived from Keynesian principles for the last two decades which eventually resulted in the stagflation of the 70s. Not many people had ever heard of Supply-side before Reagan ran for office many people called it “Reaganomics”. The whole idea behind supply-side is to reduce taxes while at the same time, reduce the growth of the federal government in order to promote growth. Another aspect of this economic principle relies on individuals drive to work, invest, and save. Changing relative prices will influence incentive to buy/invest. In August 1981 President Reagan signed into law a bill that would cut personal income taxes by 25% that would be phased in over the course of three years. The recession of 1980 and 1982 had the media and democrats blaming the tax cuts for causing it before they were actually fully...