100%(2)2 out of 2 people found this document helpful
This preview shows page 7 - 9 out of 30 pages.
11.11.2 Discuss the significant domesticpolicy speeches of Truman, Eisenhower,Kennedy, Johnson, Nixon, Carter,Reagan, Bush, and Clinton (e.g., withregard to education, civil rights, eco-nomic policy, environmental policy).REP 1 Students distinguish validarguments from fallacious argumentsin historical interpretations.HI 2 Students recognize the complexityof historical causes and effects, includ-ing the limitations on determiningcause and effect.HI 4 Students understand the meaning,implication, and impact of historicalevents and recognize that eventscould have taken other directions. HI 6 Students conduct cost-benefitanalyses and apply basic economicindicators to analyze the aggregateeconomic behavior of the U.S. economy. ▼
BUDGET CUTSReagan’s strategy for downsizing the federal government includeddeep cuts in government spending on social programs. Yet his cuts did not affectall segments of the population equally. Entitlement programs that benefited themiddle class, such as Social Security, Medicare, and veterans’ pensions, remainedintact. On the other hand, Congress slashed by 10 percent the budget for programs that benefited other groups: urban mass transit, food stamps, welfarebenefits, job training, Medicaid, school lunches, and student loans. TAX CUTS“Reaganomics” rested heavily upon supply-side economics.Thistheory held that if people paid fewer taxes, they would save more money. Bankscould then loan that money to businesses, which could invest the money inresources to improve productivity. The supply of goods then would increase,driving down prices. At Reagan’s urging, Congress lowered income taxes by 25percent over a three-year period. Reagan based his ideas for supply-side econom-ics on the work of economists such as George Gilder and Arthur Laffer.A PERSONALVOICEARTHUR LAFFER“The most debilitating act a government can perpetrate on its citizens is to adoptpolicies that destroy the economy’s production base, for it is the production basethat generates any prosperity to be found in the society. U.S. tax policies over thelast decade have had the effect of damaging this base by removing many of theincentives to economic advancement. It is necessary to restore those incentives ifwe are to cure our economic palsy.”—The Economics of the Tax Revolt: A ReaderINCREASED DEFENSE SPENDINGAt the same time, Reagan authorized increasesin military spending that more than offset cuts in social programs. Between 1981and 1984, the Defense Department budget almost doubled. Indeed, the presidentrevived two controversial weapons systems—the MX missile and the B-1 bomber.In 1983, Reagan asked the country’s scientists to develop a defense system thatwould keep Americans safe from enemy missiles. Officiallycalled the Strategic Defense Initiative,or SDI, the sys-tem quickly became known as Star Wars, after the title of apopular movie. The Defense Department estimated that thesystem would cost trillions of dollars.