Reagan economy

Inflation, interest rates, unemployment reached what in 1980?

inflation: 13.5%

interest: exceeded 20%

unemployment around 7.1%

by the end of the 1970s, federal spending as a share of GDP stood at..

23.5%

Reagan’s economic philosophy:

• supply-side economics

• against governmental interference

• wanted to:

  • reduce big gov

  • cut taxes

  • limit union power

  • promote corporate growth

Federal reserve Chairman Paul Volker sharply tightened money supply which caused…

interest rates to soar to over 20%

Volker’s strategy succeeded in cutting inflation from..

13.5% in 1980 to 3.2% by 1983

by late 1982, the national unemployment rate…

had risen to 10.8%- the highest since the 1930s

in the industrial Midwest- known as the ‘rust belt’- unemployment topped..

15%- 2.5 million manufacturing jobs were lost.

between 1983 and 1989, real GDP grew by almost…

one third, and real GDP per capita rose by 23%
(became known as the Reagan boom’

unemployment steadily declined to…

5.3% by 1989

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How many new jobs had been created during Reagan’s presidency?

20 million

How much did real per capita disposable income rise by between 1982 and 1989

18%

Reagan carried how many states in the 1984 election?

49/50

defeated Democrat Walter Mondale by margin of 17 million votes

Economic Recovery Tax Act, 1981 (ERTA) reduced income tax rates by..

and lowered the top marginal tax rate from..

25%

70% to 50%

Tax reform act 1986 reduced the number of tax brackets, cutting the top rate to..

and raising the bottom rates from..

28%

11% to 15%

how many Americans were removed from the tax polls entirely?

6 million low-income Americans, ultimately meaning they no longer paid federal income tax

The richest 1% saw their effective tax rate drop by..

and the poorest fifth experienced an increase in total tax of..

14.4%

16%