T5: The impact of the Reagan presidency 1980-96 Flashcards
(32 cards)
What is Reagan’s background?
Radio Announcer, Actor, and TV Host: Reagan’s background primed him for politics because he was a charismatic and an exceptional orator.
Political shift: He admired FDR’s New Deal for providing jobs for his father and brother during the Great Depression. He was a Democrat until around 50 years old. His views gradually became conservative with his increased wealth and opposition to high taxes. He famously said, “I didn’t leave the Democrat party, the Democrat party left me.”
Anti-Communist Stance: As president of the Screen Actors Guild during the Second Red Scare, he developed a strong hostility to Communism during the SRS / Hollywood 10 purge.
Governor of California: He cracked down on student activism. He signed California’s most liberal abortion bill. He opposed Proposition 6 / Briggs initiative.
Presidential Runs: Unsuccessful in 1968 and 1976, Successful in 1980. Re-elected in 1984.
1980 and 1984 elections
1980 Election:
1980 TV Debate: The debate between Reagan and Carter amassed 80.6 million views, demonstrating the election’s prominence.
Defeated George H.W. Bush for the Republican nomination
Defeated Jimmy Carter in a landslide, winning 44 states
Appealed to the silent majority and unified the conservative coalition (he united middle America and various conservative factions, including the old right (concerned
about economic policies) and the new right (concerned about moral degeneration))
Won 489 electoral college votes to Carter’s 49, and 50.7% of the vote.
1984 Election:
Re-elected in a historic landslide, winning 49 states with 525 electoral college votes, only losing to Mondale’s home state, 58.8% of the vote.
He was seen as a strong leader due to economic upturn after a brief recession in 1983.
What was the economic and political backdrtop of the 60s and 70s?
- 1950s Boom Dissipation: The post-war boom dissipated by the 1960s due to the costly Vietnam War and Great Society programs.
- Stagflation: The new economic phenomenon of stagflation pervaded the 1970s, along with various energy crises in 1973 and 1979.
- Keynesian Economics: A theory defined as high borrowing for social programs to simulate economy, and then repaid by increasing taxes and building a surplus. One-Eyed Keynesianism was unsustainable spending without repaying the deficit.
- Crisis in conficdence: fatih in the executive at an all time low, due to Watergate, presidential failures and the soci-economic climate. Reagn promtoed the idea of optimism, populism and American exceptionalism, which appealed to the New Right and the silent majority.
What are the four pillars of Reaganomics?
Four Pillars of Reaganomics:
1. Cutting taxes (income tax and capital gains tax)
2. Reducing federal spending (cutting welfare programs like Medicare and food stamps)
3. Reducing government regulation (deregulation)
4. Tightening the money supply to reduce inflation (monetarism)
Reagan and Economic theory
Supply-Side Economics: A theory focusing on boosting economic growth by increasing the supply of goods and services through tax cuts and deregulation, encouraging investment to increase jobs and productivity.
Links to trickle-down theory: Tax cuts and deregulation for the wealthy and corporations mean they have more money to invest in the economy, leading to overall greater growth. Key principle: “A rising tide lifts all boats.”
Monetarism: Controlling the money supply manages inflation through higher interest rates to discourage borrowing and spending, decreasing demand and stabilising prices. Implemented by Federal Reserve Chairman Volcker. By the end of 1981, inflation was no longer in double digits. A brief recession in 1983 improved by 1984, coinciding with the presidential election. Monetarism left a lasting negative effect on people who couldn’t pay mortgages and became homeless. Businesses which relied on long-term loans, such as farmers and car manufacturers, also suffered.
Big government: Reagan perceived the Democratic Party as extending and overreaching government control and excessively spending on social programs.
He believed the extensive bureaucracy providing too much welfare had widened the deficit and weakened America’s superpower status. Reagan championed a cyclical return to the republicanism of the 1920s through rugged individualism and encouraging big businesses and monopolies in industry.
Balancing the Budget: Reagan aimed to end the annual budget deficit, which is the amount of money left once inputs and outputs are calculated. Debt is the amount of
money that the government borrows over the long term to cover these deficits. He made huge cuts to welfare, education loans and social security. Yet, he also increased defence expenditure and made huge unfunded tax cuts.
What was Reagn’s stance on unions and workers?
Reagan, despite being a union leader himself, was hostile to the rights of worker. In August, 1981 he fired 11,345 PAC co-workers (air traffic controllers), showing a hardline anti-union stance contrasting previous presidents’ strong labor relations.
13,000 had striked initially, then 11,345 struck again and were fired.
Economic Recovery Tax Act, ERTA 1981
Passed in Reagan’s first 100 days.
Cut marginal income tax by 23% over three years.
Top tax band rate fell from 70% to 50%.
Lowest tax band fell from 14% to 11%.
Capital gains tax fell from 28% to 20%.
Gave businesses tax breaks, favouring small businesses and entreprenuers. This facilitated the rise of tech giants like Apple and Microsoft.
Favored small entrepreneurs but disproportionately benefited the wealthy, classic example of trickle-down theroy being applied.
Passed with concessions to Democrats in a divided government (Republican Senate, Democratic House of Representatives).
Omnibus Budget Reconciliation Act (OBRA) 1981
Proposed various tax cuts taking 35bn, 45 billion in the initial bill).
Introduced deep cuts to welfare, namely through Medicaid, food stamps, and student loans.
Disadvantaged the poorest, as welfare cuts were aggressive and not replaced by alternatives. Justified as short-term pain for long-term gain.
Tax Equity and Financial Responsibility Act (TEFRA) 1982
In response to a brief recession, he made changes to the budget to address the widening deficit.
Tightened tax rules, closed tax loopholes, and reduced tax evasion.
Temporarily raised taxes on cigarettes and telephone services, seen as a partial reversal of earlier tax cuts.
Consolidated Omnibus Budget Reconciliation Act (COBRA) 1986
Revised the budget to save federal government money by shifting costs to state or private bodies.
Shifted responsibility for many health care payments from the government to the employer.
Required employers to allow employees who lost their jobs to retain limited health insurance coverage.
Seen as a balance to enhance continuity of health insurance coverage for workers.
Example of workfare to cut federal spending.
Tax Reform Act (TRA) 1986
Revised and simplified the tax code.
Reduced the number of tax brackets and closed tax evasion loopholes.
Lowered the top income tax rate from 50% to 28% but raised the bottom rate to 15%.
Exempted 6 million of the poorest families from paying tax.
Passed through partnership and Reagan’s communication skills.
Effects of Reaganomics (successes and failures, stats.)
Positive effects:
* Inflation: Fell from 13.5% to 6.2% in two years. By 1996, it remained largely below 5%. Eradicated stagflation
* 7 million new jobs created. Unemployment decreased from 7.1% to 5.5% by 1988\
* Real GDP grew over one-third during Reagan’s presidency, an over $2 trillion increase. The compound annual growth rate of GDP was 3.6% during Reagan’s eight years, compared to 2.7% during the preceding eight years. Longest period of peacetime economic growth since Eisenhower.
* Inspired electronics industry and new services (e.g., Apple and Silicon Valley).
Negative effects:
* The National deficit Increased from 208 billion in 1983 to 2.1 trillion in 1988.
* Unemployment: Rose from 7.1% to 9.6% in his first three years. It is important to note that the percentage of people in temporary or part-time work had risen. Deregulation enabled businesses to exploit workers by neglecting health and safety standards. Many unemployed individuals, such as those considered unemployable due to drug use, were excluded from employment figures (34.5% of the population in 1988). So, unemployment quality had been decreased, net negative effect.
* Widening health disparity led to the eradication of the middle class, pushing most families to lower income levels, due to the flawed idea of trickle down economics.
* The U.S. increasingly funded its spending by borrowing from abroad. The UK became a borrowing rather than a lending nation.
* Monetary policy deepened the recession he inherited in 1983.
* Economic recovery was largely due to the discovery of new oil resources.
* Tax cuts exacerbated the wealth divide.
* Deregulation increased the risk of workers and investments (SNL crisis). Ultimately, it cost more for the government in the long term.
Reagan and Defence
Defence spending increased by 5% over seven years (1980-1987), from 23% to 28% of GDP. He spent over 200 billion alone on defence during his presidency, depspite his intentions of reducing federal specnding and deficit.
Strategic Defence Initiative (SDI) 1983: Reagan spent 30 billion on this project alone, for an unrealistic defence initiative.
Reagan and De-regulation
Reagan aimed to create a free market economy by eliminating restrictions on businesses. This aligned with his objectives to facilitate unfettered capitalism, reduce expenditures, and shrink big government.
Executive Order 12288: Rescinded Carter’s Executive Order initiating wage and price controls. In 1981, Reagan deregulated oil and fuel prices. This policy, initially put forward by Carter, led to businesses charging higher prices. Demand subsequently fell, stabilizing prices and deeming it a necessary measure.
Monopolies and conglomerates rose, workers were exploited, and the quality of employment decreased.
Environmental regulations from the Ford and Carter eras were removed but eventually reinstated.
Garn St Germain Depository Act, 1982
Reagan and Trade (Shipping Act 1984, Foreign Trade and Competitiveness Act)
Shipping Act, 1984: This act loosened regulations on U.S. and foreign shipping:
The U.S. became more of an importer than an exporter. Japanese businesses invested in the U.S. Profits were reinvested into Japan, not the U.S.
Foreign Trade and Competitiveness Act, 1988: This act allowed the president more rights in making trade treaties to benefit the USA. The textile industries were badly affected: Around 250 textile plants closed over five years. 300,000 workers lost their jobs.
Garn St Germain Depository Act 1982
This act deregulated savings and loans institutions, leading to: Inexperienced lenders.
Risky property speculation. Malpractice and scandalous activities involving the use of funding investment. The savings and loans bailout in 1989 cost taxpayers around $130 billion to bail out over 1,000 institutions.
Reaganism and Ideology of the New Right and Neoliberalism
The New Right: A conservative coalition of groups with traditional conservative social values: Concerned with morality, liberalism, and the new left. Included Christian fundamentalists and evangelicals. The old right, concerned over fiscal policy, joined in coalition. Reagan seized on populism and subverted it to attack big government.
Appealed to the silent majority and middle America.
Beliefs: Opposed affirmative action and busing. Believed in school prayer and opposed contraception and abortion. Created a distinction between the deserving poor and those deemed as welfare scroungers. Crucially, Reagan did not implement his ideology into law, as he was a political pragmatist and therefore knew that doing these policies would not be palatable to swing voters. He knew the Religious right would have continued to vote for him regardless if he did.
Reagan and Welfare
Ronald Reagan’s stance on welfare was rooted in a strong belief in personal responsibility, limited government, and free-market solutions. He significantly cut welfare spending—dropping federal welfare funding from $59 billion in 1980 to $157 billion in 1981 (inflated figures likely reflect broader welfare-related spending but cuts were nonetheless targeted and deep). Eligibility for Social Security and welfare was tightened, and benefits were capped, making access more difficult. Student loans were slashed, reversing earlier efforts toward educational equality. Reagan promoted workfare policies, requiring recipients to work in order to receive aid, despite a deregulated market that often offered low-quality jobs. Stereotypes like the “welfare queen” helped justify these reforms, framing welfare recipients—especially black women—as exploitative. Though most welfare programs faced cuts, popular provisions like Medicare, pensions, and children’s food programmes were largely preserved. However, severe reductions in social housing funding led to a spike in homelessness, highlighting the human cost of Reagan’s welfare rollback.
Job Training and Partnership Act (1982)
Shifted job training responsibility from the federal government to state and private schemes.
Viewed as new federalism to decrease big government through privatization.
Removed the requirement for trainees to receive minimum wage, resulting in cheap labor and job instability.
Social Security Reform Bill (1983)
Delayed the linking of payments to inflation from July to December.
Increased tax payments of wages for those on welfare.
Made parts of welfare taxable.
Tightened criteria of eligibility for welfare.
Increased the retirement age from 65 to 67.
McKinney-Vento Homeless Assistance Act (1987)
Response to the urgent homelessness crisis.
Provided welfare for the homeless.
Established FEMA (Federal Emergency Management Agency) to assist the homeless in transitional housing, emergency medical care, job training.
Family Support Act (1988)
Stated that a family is only eligible for benefits if at least one parent works 16 hours a week.
Disproportionately disadvantaged single mothers and parents, and perpetuated ideal of patriarchal norms.
Required single parents to finish education and undergo job training to qualify for childcare.
Unrealistic and slow to implement.
Perpetuated the assumption of a heterosexual nuclear family.
Reagan, women and ethnic minorities
Women’s earnings increased from 62% of men’s earnings in 1980 to 72% in 1990.
The Supreme Court did not reverse Roe v. Wade, but Reagan was vocally anti-abortion.
In 1980, Operation Rescue was established and used sit-ins to block access to abortion clinics.
The Supreme Court ruling Bone v. Kendrick denied funding to pro-choice programs.
Appointed the first woman to the Supreme Court, Sandra Day O’Connor. Was critical of the Equal Rights Amendment in 1982.
Reagan opposed the Civil Rights Act of 1964 and the Voting Rights Act of 1965.
He was unsympathetic towards the NAACP.
He was critical of busing and affirmative action, viewing it as a form of reverse discrimination.
Signed a 25-year extension of the Voting Rights Act in 1982 but did not actively support minority rights.
Urban cities with black populations grew rapidly due to white flight, leading to poor living conditions because of restricted federal funding to public services.
The black middle class did grow, with the success of figures like Oprah Winfrey
The “welfare queen” stereotype increased hostility towards poor black people.
In 1982, the NAACP highlighted the failures of the Reagan administration regarding minorities.
Disporportionately targeted ethnic minorities in the War on Drugs
The AIDs crisis
The AIDS epidemic was associated with immorality, as it affected gay men and intravenous drug users.
Reagan was openly homophobic, but the death of his friend Rock Hudson from AIDS shifted his perspective.
He later increased funding for AIDS prevention and research, spending $2.3 billion.
The delayed response resulted in a hundred thousand deaths by 1990.
Criticized for not addressing the crisis forcefully enough.
