Economy in The Reagan Era Looking at the Past Through the Lens of Economy The Miseries of Stagflation When Ronald Reagan took over the leadership of the United States in 1981, he inherited an economy that was in terrible shape —the worst American economy, in fact, since the Great Depression of the 1930s. Americans had enjoyed a prolonged period of widespread prosperity from the beginning of World War II through the end of the 1960s, but that long boom—built largely on the absolute supremacy of American industrial production , a temporary consequence of the destruction wrought on every other major industrial power (Germany , Britain , France , Italy , Russia , Japan ) during World War II—had run out of steam by the early 1970s. The economy began to sag under the weight of a multitude of new structural challenges. As Europe and Japan finished rebuilding from the Second World War, American manufacturers lost their effective global monopoly and soon found themselves struggling to compete with
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