Reaganomics - Reaganomics A fix to the unemployment and...

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Unformatted text preview: Reaganomics A fix to the unemployment and inflation of the time. ELECTI NG RONALD REAGANTWI CE Ronald Reagan for Reagan/Bush '84 http://www.youtube.com/watch?v=SDM ksN-Z Ronald Reagan TV Ad: "Reaganomics" http://www.youtube.com/watch`?v=GhgiOSgB Reagan won 525 elector al votes and 49/50 states leaving M ondale with his only state of M innesota and 3800 votes. (Wikipedia) (Youtube) Stagflation-time befor e Reagans Administr ation-Political pr essur e r esults in expansion of money supply. -Nixon's wage and pr ice contr ols abandoned-Under For d the pr oblems continued, but policy was mor e pr udent. -feder al oil r eser ves cr eated to ease futur e shor t ter m shocks-Car ter star ted phasing out pr ice contr ols on petr oleum (Wikipedi a) Stagflation-M uch of cr edit for r esolution of the stagflation is given to a thr ee year contr action of the money supply by the Feder al Reser ve under Paul Volcker to long ter m easing of supply and pr icing in oil dur ing the 1980s oil glut ( Wikipedia ) This Car toon Shows the differ ences between Reaganomics and FDRs economic policies like the New Deal. The Four Pillar s Reagan+Economics=Reagano mics 1. r educe govt. spending 2. r educe mar ginal tax r ates on income fr om labor and capital 3. r educe gover nment r egulation of the economy 4. contr ol the money supply to r educe inflation Reduce government Spending Reduce Marginal Tax Rates Reduce govt. Regulation of Economy Control $ supply to reduce inflation (Wikipedia) The Roots-Reaganomics r oots in two of Reagan's campaign pr omises: 1) lower taxes 2) a smaller gover nment-r educed income tax r ates with the lar gest r ate r eductions on the high incomes-in a time of battling inflation Reagan r aised deficit spending to (Reeves, 203) (Wikipedia) The Beginnings- lifted r emaining domestic petr oleum pr ice and allocation contr ols on Januar y 28 , 1981- lower ed Oil Windfall pr ofits tax in August 1981, helping end the 1979 ener gy cr isis- ended Oil Windfall pr ofits tax in 1988 dur ing 1980s oil glut- Tax Refor m Act of 1986 , Reagan and (Reeves, 203) The Gr owing Economy- income tax r ates dr opped fr om 70% to 28% in 7 year s - payr oll taxes incr eased- Real Gr oss Domestic Pr oduct (GDP) gr owth r ecover ed str ongly after the 1982 r ecession at annual r ate of 3.4% per year slightly lower than post- Wor ld War I I aver age of 3.6%- Unemployment peaked over 10.7% per cent in 1982 then dr opped dur ing r est Reagan's ter ms Nelson, 64. Tr ickle Down Affect- policies der ided as " Tr ickle-down economics due to the significant cuts in the upper tax br ackets- massive incr ease in Cold War r elated defense spending caused lar ge budget deficits- the U.S. tr ade deficit expansion contr ibuted to Savings and Loan cr isis- cover new feder al budget deficits, United States bor r owed heavily both (Wikipedia) Tax Revenue Tax Bill 1 2 3 4 Fir st 2 yr avg 4 yr avg Econ. Recover y Tax Act of 1981-1.21-2.60-3.58-4.15-1.91-2.89-2....
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Reaganomics - Reaganomics A fix to the unemployment and...

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