How Did Ronald Reagan Change The Economy

As the 1980s rolled in, the American people were desperate for a change as the American government and economy crashed. There had been a period of economic stagflation since Gerald Ford’s presidency in 1976. Americans found hope in presidential candidate Ronald Reagan to transform the nation’s situation, and on January 20, 1981, Ronald Reagan became the United State’s 40th president. Reagan brought about a lot of drastic changes in the American economy and government. For example, he decreased the size of the federal government and put a conservative economic policy into practice. This policy was called Reaganomics by the public.

Reaganomics called for widespread tax cuts, increased military spending, decreased social spending, and included the deregulation of domestic markets. President Reagan pledged that he would make cuts in both income taxes and capital income taxes, and that he would diminish the government’s influence on the economy. During President Reagan’s first term, Congress approved a 25% cut. President Reagan made efforts to improve the United State’s defense industry, claiming that the United States was open to a “window of vulnerability” to the Soviet Union. A lot of money was put into

However, government spending wasn’t lowered, and with tax cuts and increased military spending, federal debt almost tripled, going from $997 billion in 1981 to $2.857 trillion in 1989. Economists and politicians argue over the impact of Reaganomics and that Reaganomics is what caused most of our national debt. In 1981, Reagan removed price controls on domestic oil and gas, cable television, long-distance telephone service, interstate bus service, and ocean shipping. President Reagan also eased bank regulations, which is seen as the cause to the Savings and Loan Crisis of 1989. The Savings and Loan Crisis of 1989 was the biggest bank collapse since the Great Depression of