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What did Reagan want to do with Government Financials
Control spending
Reduce involvement
Cut taxes
What was Reagan influenced by
“Supply-Side” economic theories
What were \n “Supply-Side” economic theories
Economy was driven by keeping production up and encouraging saving. “Trickle down” economics
What did Reagan do 3 days after taking office
Fired white-house staff and put a federal government hiring freeze in place.
What did Reagan want to do with his whole budget policy
Wanted to put his whole budget in a single bill
What was Reaganomics
His plan for economic recovery
What were the 4 parts to Reaganomics
Cutting the federal deficit
Personal and Business Tax Reductions
Deregulation
Planned Control of the Money Supply
How did Reagan plan to cut the federal deficit
A budget bill that aimed to reduce the deficit
What did the budget bill aim to reduce the budget from in 1981 and to in 1986
1981: 22%
1986: 19%
What did Deregulation do
Removed federal control in industry, state and local government
What kind of majority was in the House of Representatives
Republican Majority. Only needed 26 Democrats to pass legislation
What is the ORA
Omnibus Reconciliation Act 1981
What was the change made to Reagan’s tax act
Cut the tax reduction from 30% to 25%
After some back and forth what is the ERTA
Economic Recovery Tax Act 1981
What did the ERTA do
Cut marginal income tax by 23%
Linked tax bands to inflation
What were Reagan’s policies of tax cuts and money supply control meant to do
Stop inflation
Reduce unemployment
Increase personal wealth
Increase productivity
Federal spending and deficit to fall
What did unemployment increase to by 1983 compared to 1980
1980: 7.1%
1983: 9.6%
What did inflation decrease to by 1982 compared to 1980
1980: 13.5%
1982: 6.2%
What do historians believe about the increase to personal wealth
Some believe the rich got richer.
Some believe that tax cuts hurt the rich the most
What did increased competition lead to in the financial sector
Problems as financial companies took increasingly bigger risks to gain customers
How did poor management of savings and loans come to a head in the 1980s
People began to lose savings and investments due to a crisis and the stock market crash in 1987
What was one of Reagan’s most notable failures
Failure in the reduction of the deficit
What was the deficit in 1980 compared to 1983
1980: $59 billion
1983: $208 billion
What did America become for the first time because of Reaganomics
A borrowing nation, instead of a lending nation
What caused the switch to a borrowing nation
Reagan’s determination to cut taxes
How did the spending of the government reverse from the 1970s
Reagan increased defence spending at the detriment to human resources
What was the % of the budget reserved for human resources in 1980 compared to 1987
1980: 28%
1987: 22%
What was the % of the budget reserved for defence in 1980 compared to 1987
1980: 23%
1987: 28%
What happened to Reagan’s policies after he had left office and was replaced with Bush
Became less popular as their long-term effects and limits became clear
Who was in control of both houses of Congress after Reagan left
Democrats
What would New Federalism do to the USA
Produce less federal interference in state and local affairs, business and finance
What could New Federalist policies be seen as
Less funding for state and local government projects and less regulation for business expansion
What did Reagan say he did to Federal Regulations
Cut them almost in half. Removing 23,000 pages
How many pages of federal regulations were there when Reagan came to power
87,000
What did Reagan say deregulation helped with
Bringing down the cost of petrol and heating fuel
What did Reagan create to combat government fraud
A federal strike force
How much did Reagan’s federal strike force save
$2 billion in 6 months
What did Reagan replace Federal agencies with
Private sector ones
What does the rising deficit show about Reagan’s control over the budget
He was focused on the small details instead of the rising overall debt
What was a main problem with deregulation
When smaller companies were struggling big companies could buy them out
Before deregulation of Savings and Loans Institutions what did they offer
Mostly provided mortgage loans at regulated interest rates
What happens to S&Ls when they began competing with other institutions
They had to make increasingly risky investments
lend at low interest rates
What act did the government have to pass as a result of money lost by S&Ls
Competitive Equality in Banking Act
How much had Savings and Loan Institutions lost by 1988
$10 billion
What happened in 1989 which made Savings and Loans losses worse
Property Market Collapse
What happened to foreign imports as the value of the dollar weakened
Imports became cheaper so the amount of imports rose
Between 1980 and 1985 how many textile plants were forced to close
250
What did Reagan see a difference with for poor people
Welfare Scroungers and Deserving Poor
What did he believe welfare scroungers were
They weren’t willing to work and they thought the government owed them a living
What did Reagan’s OBRA finance cuts mainly target
Federal projects aimed to help the poorest
What did OBRA do to the Aid to Families With Dependent Children (AFDC)
Fewer people were eligible and payments were capped
What did Reagan want to change welfare into
Workfare
What did Workfare require
Required at least one working parent before it paid out family benefits.
What did many single parents find hard to find
Childcare so working became impossible
By 1987 how many states were running welfare work programmes
42
How many families qualified for low-income and how many houses were available
2.4 million
3.7 million
What happened to the Federal funding for low-cost housing projects
It was slashed from $32.2 billion in 1978 to $9.2 billion in 1988
What did the 1987 McKinney Act setup
Federal Emergency Management Food and Shelter Program
What did the Federal Emergency Management Act setup
Federal housing project for transitional housing
What did the average mortgage debt increase by
30% and the rate of foreclosure quadrupled
What was the impact of removal of federal regulations on working conditions
Longer hours, less leisure time
How much Leisure time did workers have 1973, 1987
1973: 26 hours /week
1987: 16 hours /week
Why did workers think that they had to work more
Constant competition to be the most productive
What emerged which made it worse for young people entering the workforce.
Two-tier wage structure:
established workers kept the wages and benefits they gained when they took the job
New workers could have a lower salary for the same job
What was the impact of the cutdown of federal involvment on Civil rights
Unwilling to extend civil rights legislation or push for affirmative action
How did Reagan’s policies lead to segregated schooling
Virtually guaranteed that children in the poorest areas would have to attend schooling there
What did the Reagan Administration do to bilingual education
Withdrew 40% of its budget: Minority children should learn English
What happened to Women’s rights under Reagan
Reagan did not support the Equal Rights Act and spoke out against abortion
What was Reagan’s reaction to the gay rights movement and the AIDS epidemic
Accused him of ignoring it until his friend (Rock Hudson) died of AIDS
Even though Reagan was against “Big government” what was he for
Big business
What did big businesses profit from
Reduced federal regulation over wages, working hours and working conditions
What did deregulation mean for businesses
Buy up or merge with businesses
What was farming affected by in the 1970s and 1980s
High interest rates and federal non-intervention
In the 1970s who did the US supply with wheat
USSR
How did the US encourage farmers to grow more wheat
With bigger loans to expand their farms and wheat subsidies
What happened after the USSR invaded Afghanistan
USA stopped exporting wheat
Why was farming hit especially bad in the 1980s
High interest rates, USA stopped exporting wheat, bad drought in 1983
What happened to many smaller farms that had failed
They were bought out by agri-businesses or companies that didn’t farm at all
What percentage of farmers were getting what percentage of subsidies
17% were getting 60% of subsidies
Who set up the National Save the Family Farm Coalition in 1986
Farmers
What did the National Save the Family Farm Coalition do
Organised demonstrations and campaigns to highlight the plight of small family farms
How did the National Save the Family Farm Coalition do their demonstrations
Slow moving tractorcades in cities
In 1983 how many farms were sold each month
500
What was the rate of farmer suicide in 1983
4x higher than other workers
What other industries apart from farming were being hit bad in the 1980s
Car and textiles
Why were the car and textile industries doing bad in the 1980s
Foreign exports could be made more cheaply
Why was Detroit hit bad by the impacts to the car industry
Car manufacturers were the main employer
What cities were 20% of the population living below the poverty line
Baltimore and Cleveland
What had happen to the defence industry under Reagan
There was increased spending on defence
Where did most people move from and too because of the new growing industries
From North and East, To South and West
Why did the people who could afford to migrate still vote for Reagan and then Bush
They felt that the Reagan policies were working for them
In 1987 what were the rates of unemployment in the in California compared to the rest of the country
5.6% compared to 7.8%
What was the state of the presidency prior to Reagan
Many didn’t trust the president due to the Watergate scandal and what had followed
How did Reagan change the view of the Presidency
He promised to make big changes and then continued to do so
How did the first few years of Reagan’s presidency help him down the line
The first few years setout how people viewed him for the rest of his presidency
How was the slowdown in change hidden from his supporters
The way he projected his presidential image and his foreign affairs successes
How were Reagan’s followers less able to prevent people from seeing their slowdown
Weren’t as good as Reagan at projecting his image.
Bush didn’t get re-elected despite having a higher approval rating (61%)
Clinton had 55% approval rating
What had happened to Reagan’s successes in Congress
They were not repeated with many of his religious right legislation being blocked by Congress
What is another reason some of Reagan’s legislation was not put into place other than Congress
He was prepared to be pragmatic and listen to advice
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Flashcard (20)