Reagan

Goal of New Federalism under Reagan - Shift power from federal government to states

Block grants - large sum of payments to states that they could use as they wished

• Helped pay for social programs

• Some grants provided less funding than federal programs they replaced, liberal critics claimed it was a way to reduce federal spending on social programs

Supported by the Moral Majority - a fundamentalist Christian group that gained political influence

Reagonomics - Supply side economies theory, lowering taxes would increase government revenue because the tax cut would stimulate the economy as a whole (Trickle down approach, money will trickle down from rich to poor)

• Cut tax for businesses, more money put into the business, higher wages for the workers, workers spend more money to stimulate the economy

• Actual consequence: Tax reduction and increased military spending added $2 trillion to the debt, foreign debt

• Deregulation - Government should not get involved in making sure companies follow certain rules, laissez faire
  - Primarily attacked environmental regulations

• Pros: Temporary prosperity and slight recovery from stagnation

Reagan Doctrine - Foreign policy

• Ends the Cold War, very anti-communist, will support any anti-comm. gov’t (Primarily in central America)

• Aid in El Salvador would counter communist influence and support struggling democratic government (Same to Nicaragua)

• Democratic gov’t in El Salvador was bad and violated human rights

• Nicaragua Contras - Money goes through Congress, Congress said no assistance to Contras (Boland Amendment), but U.S. money backed Contras for political ideology purposes
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Berlin Wall - Symbol of repression, surrounded West Berlin to prevent people from fleeing East (Repressed)