American Economics 1945-2015

Truman

• GI Bill: Helped veterans get education, housing, and jobs — a major stimulus to the economy.

• Fair Deal: Proposed expanding Social Security, raising minimum wage, national health insurance — not all passed, but reflected Keynesian ideals.

• Managed wartime demobilization, labor strikes (e.g. railroad strike), and inflation through short-term controls.

• Maintained high military spending during the Cold War, especially Korean War (military Keynesianism).

Eisenhower (1953–1961)

• Fiscal conservative: kept balanced budgets (more cautious Keynesianism).

• But still supported New Deal-style programs (Social Security expanded, highways built).

• Interstate Highway Act (1956): Huge infrastructure project — employed many, boosted economy.

• Believed in moderate intervention — "Modern Republicanism": fiscally conservative, socially moderate.

Kennedy (1961–1963)

• Proposed major tax cuts to stimulate growth (inspired by Keynesian theory).

• Investment in defense and space programs (NASA/Apollo) also boosted economy.

• Pushed New Frontier programs, but many were blocked by Congress.

Johnson (1963–1969)

• Great Society: Major Keynesian welfare expansion.

  • Medicare and Medicaid (1965)

  • War on Poverty: Job Corps, Head Start, food stamps

  • Education funding, housing programs, Social Security expansion.

• High government spending on Vietnam + Great Society → helped economy grow short-term, but caused deficits and inflation.

Nixon (1969–1974)

• Claimed to be conservative but supported Keynesian measures.

• Wage and price controls (1971) to fight inflation — unusual for a Republican.

• Took U.S. off gold standard → start of floating exchange rates.

• Ran deficits and increased Social Security and other domestic programs.

• Economy faced "stagflation": inflation + unemployment.

Ford (1974–1977)

• Continued fighting stagflation (oil shocks, slow growth).

• Introduced WIN (Whip Inflation Now) campaign — encouraged voluntary cutbacks, largely ineffective.

• Did not support heavy government spending — more conservative economically.

Carter (1977–1981)

• Struggled with stagflation, energy crisis.

• Deregulated key industries (airlines, trucking) → groundwork for later Republican economic policies.

• Created Department of Energy, promoted alternative energy.

• Supported tight monetary policy (via Fed Chair Paul Volcker) late in term → led to high interest rates to curb inflation.

Reagan (1981–1989) – Supply-Side / Trickle-Down Economics

• Massive tax cuts (especially for wealthy) — Economic Recovery Tax Act of 1981.

• Deregulation of industries.

• Cut domestic spending (especially welfare), but military spending soared → deficits grew.

• Believed in "Reaganomics": lower taxes = more investment = more jobs = economic growth.

• Short-term: boosted growth and tamed inflation, but increased debt and income inequality.

Bush I (1989–1993)

• Promised "no new taxes" → then raised them to reduce deficit (hurt reelection chances).

• Recession in early 1990s hurt economy.

• Continued many Reagan-era policies but with more emphasis on deficit control.

Clinton (1993–2001)

• More centrist approach: "Third Way" economic policy.

• Raised taxes on wealthier Americans early on to reduce deficit.

• Welfare reform (1996): reduced federal welfare programs, added work requirements.

• Huge economic boom: dot-com boom, globalization, tech growth.

• Left office with budget surplus — rare in modern era.

• NAFTA (1994): increased trade but controversial.

Bush II (2001–2009) – Return to Supply-Side

• Passed large tax cuts (especially 2001 and 2003).

• Massive military spending (Iraq and Afghanistan).

• Ran large deficits despite economic growth early on.

• Economy crashed in 2008 due to housing bubble collapse and banking crisis.

• Passed TARP (2008): bailout for banks.

Obama (2009–2017)

• Inherited Great Recession.

• American Recovery and Reinvestment Act (2009): $800+ billion stimulus — tax cuts, infrastructure, green energy.

• Dodd-Frank Act: Re-regulated Wall Street to prevent future crashes.

• Obamacare (ACA): health insurance expansion — economic impact through subsidies and regulations.

• Slow but steady recovery; unemployment fell, markets recovered.