Reaganomics Essay

During the last decade of the Cold War, President Ronald Reagan presented a battery of economic reforms influenced by supply-side economics. The reforms of 1981 and 1986 lowered the tax rate for individuals and corporates, introduced deregulations and simplified taxation. The belief in the Laffer curve, which claims that deregulation and lower marginal taxes will increase government revenue and economic growth, justified the reforms in addition to neoliberal ideas. Did Reaganomics, the Reagan application of free market capitalism, encourage social mobility and prosperity for all citizens, or did it let the wealthy retain and develop their economic status

Reagan really focused on improving the economy during his presidency, with a plan he called Reaganomics, or supply side economics. The main parts of this plan were cuts on taxes and budgets, and monetary policy. Also, he wanted to reduce government regulation on businesses. He thought that these and increasing defense expenditures would heighten economic efficiency. Reagan managed to cut taxes by twenty five percent in three years. However, the plans did not work out at first, causing a recession that some call “The Great Inflation.” The national debt heightened substantially, and the rate of unemployment reached up to eleven percent. Despite these negative outcomes, the economy experienced a sudden growth and prosperity in 1983, which was

(Kaitlyn Miller Disc.) 3. This occurred, while "the income of middle-class families, especially those with a wife who did not work outside the home, stagnated while that of the poorest one-fifth of the population declined". So in other words, Reagan's idea of lowering the taxes for all, was a good idea, but in practice fell short. Instead of economic freedom for all, it was economic freedom for the wealthy.

President Ronald Reagan worked so hard and put his life on the line where he also had

Reagan implemented policies based on supply-side economics and advocated a classical liberal and laissez-faire philosophy, seeking to stimulate the economy with large, across-the-board tax cuts. Reagan’s outlook on economics was what he and the public called “Reaganomics”. “The blueprint for “Reaganomics,” was a sketched out supply-side approach to the economic, including massive cuts in income taxes, capital gains taxes, and corporate taxes,”(340). His platform advocated reducing tax rates to spur economic growth, controlling the money supply to reduce inflation, deregulation of the economy, and reducing government spending. Reagan's policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment, which would then lead to increased economic growth, higher employment, and wages. Reagan’s beliefs on cutting taxes were supported by ideas of William Sumner who believed that the best equipped to win the struggle for existence was the American businessman, and concluded that taxes and regulations serve as dangers to his survival. Reagan believed strong nations were composed of people who were successful at expanding their empires and these strong nations would survive in the struggle for dominance.

Reaganomics—also known as supply-side and trickle-down economics—is an economic policy practiced by presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover in the twenties and most recently, by the fortieth president of the United States, Ronald Reagan. Just like the state of the economy before Reagan stepped into office, the economy of the United States today is in a vulnerable place. The economy has taken multiple blows over the last few years: a recession in 2008, a close call in 2011, and an overwhelming deficit. Most Americans are looking for something to change. While some are advocating for an increase in the government’s power in order to step in and seemingly help the people, the way for the government to truly succor

Leading up to the year 1981, America had fallen into a period of “stagflation”, a portmanteau for ‘stagnant economy’ and ‘high inflation’. Characterized by high taxes, high unemployment, high interest rates, and low national spirit, America needed to look to something other than Keynesian economics to pull itself out of this low. During the election of 1980, Ronald Reagan’s campaign focused on a new stream of economic policy. His objective was to turn the economy into “a healthy, vigorous, growing economy [which would provide] equal opportunities for all Americans, with no barriers born of bigotry or discrimination.” Reagan’s policy, later known as ‘Reaganomics’, entailed a four-point plan which cut taxes, reduced government spending,

Reagan's campaign stressed some of his principles: lower taxes to balance the economy, less government shenanigans in people's lives, states' rights, and a good national defense.

Within seven years the wealthy had more money, but could also afford to give better pensions and pay raises. He reduced income tax from the top bracket 70% down to 28% spurring growth from the top on down and vice versa. This gave some people who lived in poverty a view that Reagan was indifferent to their struggles. This may have seemed the case but growth did happen, and hopefully those critics found jobs; however, driving to those jobs still pinched the pocket book a bit due to the energy crisis at that time.

This economic expansion and boost would occur through citizens who would spend the extra tax money on products and services in their geographical region or who would invest money into businesses in their area. The only problem for the government using this theory would be the initial revenues that the government would lose from the tax cuts. In theory the economic growth would eventually increase taxable incomes, this increase in taxable incomes should cause the governmental revenues to grow in the long run. With the idea of Reaganomics in mind President Reagan persuaded Congress to pass the Economic Recovery Tax Act, which is the first major step in his plan. This Tax Act called for a 25 percent tax cut that was implemented over a three-year period (David Mervin, 1990, 133-7). The only problem with this tax cut is the fact that it mainly benefited the upper - income taxpayers and large corporations. The reason that these groups were targeted is because there is more of a chance that they will invest their money in business programs that will promote economic growth. After this tax cut took effect the American people in the lower - income tax brackets were not pleased with the results. They seemed to be faced with an increase in their tax rates even though most of them were in the income categories below the national average. On the other end of the spectrum the people that were in the upper tax brackets were experiencing significant tax cuts. The

Ronald Reagan created economic policies called Reaganomics. These policies were different than the policies that the United States had since Franklin

According to Sue Kirchhoff, Barbara Hagenbaugh and Sandra Block of USA TODAY, “Former president Ronald Reagan 's dramatic economic policies are influencing U.S. and world growth — and government action — more than 20 years after he pushed his radical plan to

This theory was meant to bring America back into the golden area of the 50’s. Reagan believed that with less taxes the middle class would be motivated to work harder because they would be getting paid more money. In addition this surplus in currency would allow the middle class to live life similar to the golden era re-investing it back in the economy boosting growth.

First of all, one policy of the Economic policy is "supply-side economic policy". Supply-side policy is a policy that is meant to improve societies' economy. Also, it is used to describe changes in marginal rates that influence the economic rates. Supply-side economic policy began in the late 1970's. From the 1990-1993 tax were increasingly high. President john F. Kennedy made tax reductions that dropped tax rates to 90 percent. By the 1980's President Ronald Reagan reduced tax rates by up to 70 percent. During his 7 year of being president economic growth increased by 4 percent. Ronald Reagan might have used supply-side economics but others have used the opposite.

For instance, in 1988, the U.S. was confronted with high inflation and decreased consumer spending. While prices rose quickly, the nation's people began to save their money, rather than invent it in the economy. It was President Ronald Reagan's ideas to reduce the government's involvement in the situation that helped to improve economic conditions. By cutting taxes to increase consumer spending, and by restricting the supply of money in the economy, he reduced the inflation from 13% to 4%. Instead of actively taking part in controlling all aspects of the economy, the government helped to solve the problem of inflation through limited involvement in the situation. The nation's people were still free to make their own economic decisions, and by reducing the taxes, citizens were able to spend more in the market. With more money begin invested in the economy and in individually owned business, there was also a demand for in the economy and individually owned businesses, there was also a demand for workers to produce the goods that the consumers now desired. By taking little government action, Regan stirred the economy, decreased unemployment involvement was necessary in the repairing of the country's economy, the amount of state control was limited.