1.5 Flashcards
How many electoral college votes did Reagan get to win the election
He won the 1980 presidential election with 489 electoral college votes - compared to Carter’s 49
What was ‘big government’
Reagan used ‘big government’ to mean too much federal interference on all levels: in state and local government, in business and in people’s lives
He promised a policy of New Federalism to reduce interference
How was the Republican government of the 1980s similar to the Republican government of 1920
The reduction of ‘big government’ was a stripping away of interventions made by liberal governments - it was a return to laissez-faire
Both anti-union - Reagan responded to workers strikes badly
Allowed for the creation of big business corporations
Both believed in significant tax reductions
New industries flourished, while mining and farming suffered
Both created economies where the wealth was concentrated at the top
Both encouraged financial speculation and had stock market crashes - 1929 Wall Street Crash, 1987 crash
Both believed in ‘rugged individualism’
What strike happened in 1981 and how did Reagan respond to it
13000 air traffic controllers went on strike
Reagan said their strike was illegal and threatened to fire the strikers if they didn’t go back to work within 48 hours
They didn’t, and he sacked them, despite protests that it would be dangerous to replace that many experienced people all at once
What were Reagan’s beliefs, how did they impact the presidency and what opposition did he receive
He was a committed Christian - he believed in traditional values, opposed homosexuality and abortion and most forms of birth control
He spoke out against abortion, gave jobs in the White House to members of the religious right, and tried to pass a law severely restricting access to abortion
However, a combination of opposition in Congress and concern about the acceptability of the laws suggested to him by the religious right, meant that his government was not as conservative as many of the religious right who had supported him would have hoped
What immediate action did Reagan take
In the three days following his inauguration,
he sacked many White House staff members
put a federal government hiring freeze in place
told all departments there was a freeze on office furnishing and equipment, and that they had to cut their travel expenses by 15%
used a series of executive orders to set up new advisory groups, reporting directly to him, on how to cut down ‘big government’
What is supply-side theory
Argues that the economy isn’t driven by consumer demand but by keeping up production and encouraging saving and investment
Suggests restraints on production (gov regulation, high taxes, strong unions) should be removed
Argued that the better-off would benefit and these benefits would ‘trickle down’ to even the very poorest
What were the four parts of Reagan’s Program for Economic Recovery
Cutting the federal deficit
Personal and business tax reductions
Deregulation
Planned control of the money supply
Explain how cutting the federal deficit works and what was a negative to it
It was accompanied by a budget bill and a proposal for cuts on domestic spending. The budget bill aimed to reduce the federal deficit from 22% of the GNP in 1981 to 19% in 1986
However, the plan being put together so hastily meant that it had a significant number of errors and a footnote that admitted that the plan included ‘as yet unidentified’ cuts of $74 billion, to be decided later
Explain how personal and business tax reductions work
It was accompanied by the Economic Recovery Tax Act of 1981
Explain how deregulation works
Removing federal control in industry, state and local government
Explain how planned control of the money supply works
Aims to keep inflation down while expanding the economy
How was the legislation passed and what problems did Reagan face
The Senate passed the budget and it was sent to the House and after some revision, was passed and became law in August as the Omnibus Reconciliation Act of 1981 (ORA)
The tax bill created a fight over control of the House
In the end, a reshaped bill was passed and became law in August, as the Economic Recovery Tax Act 1981 (ERTA)
What were Reagan’s economic legislation and other economic measures
1981 - Executive order setting up the President’s Economic Policy Advisory Board
1981 - Executive order setting up the President’s Commission on Housing
1981 - Economic Recovery Tax Act (ERTA)
1981 - Omnibus Budget Reconciliation Act (ORA)
1982 - Tax Equity and Financial Responsibility Act (TEFRA)
1986 - Consolidated Omnibus Budget Reconciliation Act (COBRA)
1986 - Tax Reform Act
What did the President’s Economic Policy Advisory Board do
Set up with economics experts from outside the government advising directly to the president
What did the President’s Commission on Housing do
Set up to investigate all aspects of housing, including how it should be financed, but mainly to find ways of saving money on federal low-cost housing schemes
What did the Omnibus Budget Reconciliation Act (ORA) do
Proposes a variety of tax cuts that will take $35 billion out of federal spending; the initial bill presented by the White House had proposed $45 billion-worth of cuts
What did the Tax Equity and Financial Responsibility Act (TEFRA) do
Made changes to the budget in response to the economic situation, tightening up tax rules, especially for businesses; it also temporarily raises taxes on cigarettes and the telephone service
What did the Consolidated Omnibus Budget Reconciliation Act (COBRA) do
Revises the budget in many minor ways to save the federal government money and to move costs to state or private bodies: the most significant change shifts the responsibility for many healthcare payments from the federal government to the employer
What did the Tax Reform Act do
Revises the tax codes, reducing the number of tax brackets; is supposed to close a lot of tax evasion loopholes and ease the pressure on poorer families
What was the result of the attempted assassination on Reagan
Reagan was hit in the chest by a bullet ricochet by John Hinckley Jr
He was driven to hospital and insisted on walking into the building unaided
He was heard apologising to Nancy saying that he ‘forgot to duck’
This cheerful demeanour and his quick recovery impressed many people and changed people’s minds on him being old and fragile, since he was the oldest person to be elected president at 69
What successes did Reagan’s policies have on inflation and unemployment
Inflation dropped to 6.2% in 1982 and by 1996 spent
most of its time under 5%
Unemployment started to drop in 1983
What failures did Reagan’s policies have on inflation and unemployment
Money supply restrictions led to a sharp rise in interest
rates
Unemployment rates went from 7.1% to 9.6%
More people were working part-time or temporary work
Unemployable were not included in figures but accounted
for 34.5% of the population by 1988
What successes did Reagan’s policies have on personal wealth
Tax cuts made many people richer
Tax cuts helped the revival of the economy
The number of millionaires doubled from the late
1970s to the late 1980s
The number of billionaires increased
Real disposable personal income increased
Federal income taxes paid by the rich rose from 18.1% - 26.1%
Taxes paid by the bottom 50% fell from 7.5% to 6.4%