9.1 Ronald Reagan
The Reagan Candidacy
Late 1970s in America:
● Many Americans grew tired of conflicts from previous decade
● Uncomfortable with growing cynicism towards political leaders
● Jimmy Carter's "crisis of confidence" speech (referred to as "malaise speech") disturbed
many Americans
Ronald Reagan:
● Saw nation was ready for change
● 1980 presidential campaign: presented himself as Washington "outsider" & Carter's
opposite
● Emphasized positive aspects of America vs. Carter blaming American self-indulgence
and consumerism
● Many voted for Reagan because of his "can-do" attitude, regardless of politics
1980 Election:
● Reagan won by landslide
● John Anderson's third-party candidacy attracted "protest vote" that might have gone to
Carter
Supply-Side Economics
Ronald Reagan's Economic Policies:
● Applied theory of supply-side economics
● Believed reducing corporate taxes would lead to greater profits, job creation, and wealth
trickle down
● Large-scale deregulation in banking, industry, and environment
● Across-the-board tax cut for all Americans
Effects of Reagan's Policies:
● Little effect initially, country continued in recession for two years
● Results mixed: inflation subsided, but criticism that rich getting richer and poor getting
poorer
● Rich used money saved on taxes to buy luxury items, rather than reinvesting in economy
as suggested by supply-side economics
, Military Spending and Budget Deficits
Ronald Reagan Administration
● New Federalism Plan
○ Shift power from national government to states
○ States take complete responsibility for welfare, food stamps, and other social
welfare programs
○ National government would assume entire cost of Medicaid
○ Goal was never accomplished
○ States feared increase in cost of state government
● Military Spending Increase
○ Funded research into space-based missile shield system (Strategic Defense
Initiative or SDI)
○ Escalated arms race with USSR
○ Historians debate contribution to end of Cold War
● Increased Deficit
○ Tax cuts, increased military spending, and failure of New Federalism led to
increase in federal budget deficit
○ Government spending increased, government revenues shrank
○ Government had to borrow money
○ Congress blamed deficit on tax cuts
○ Reagan blamed Congress for refusing to decrease funding for social welfare
programs
○ Federal deficit reached record heights during Reagan administration
Foreign Policy Under Reagan
● Ending the Cold War
○ Supported repressive regimes and right-wing insurgents
○ U.S. military led international invasion of Grenada
○ Priority: support for Contras in Nicaragua
■ Contras known for torturing and murdering civilians
■ Congress cut off aid, Reagan administration funded through other
channels (Iran-Contra affair)
■ Constitutional crisis, debate over power of the purse and checks and
balances
○ Marines sent to Lebanon as part of UN peacekeeping force
■ Suicide bomb killed 240 servicemen
■ Eventual pullout of troops
● U.S.-Soviet Relations
○ Reagan's hard-line anticommunism initially led to deterioration in relations
○ Rhetorical war and escalated arms race
○ Adversaries eventually brought to bargaining table due to high cost
○ Gorbachev rose to power in Soviet Union
The Reagan Candidacy
Late 1970s in America:
● Many Americans grew tired of conflicts from previous decade
● Uncomfortable with growing cynicism towards political leaders
● Jimmy Carter's "crisis of confidence" speech (referred to as "malaise speech") disturbed
many Americans
Ronald Reagan:
● Saw nation was ready for change
● 1980 presidential campaign: presented himself as Washington "outsider" & Carter's
opposite
● Emphasized positive aspects of America vs. Carter blaming American self-indulgence
and consumerism
● Many voted for Reagan because of his "can-do" attitude, regardless of politics
1980 Election:
● Reagan won by landslide
● John Anderson's third-party candidacy attracted "protest vote" that might have gone to
Carter
Supply-Side Economics
Ronald Reagan's Economic Policies:
● Applied theory of supply-side economics
● Believed reducing corporate taxes would lead to greater profits, job creation, and wealth
trickle down
● Large-scale deregulation in banking, industry, and environment
● Across-the-board tax cut for all Americans
Effects of Reagan's Policies:
● Little effect initially, country continued in recession for two years
● Results mixed: inflation subsided, but criticism that rich getting richer and poor getting
poorer
● Rich used money saved on taxes to buy luxury items, rather than reinvesting in economy
as suggested by supply-side economics
, Military Spending and Budget Deficits
Ronald Reagan Administration
● New Federalism Plan
○ Shift power from national government to states
○ States take complete responsibility for welfare, food stamps, and other social
welfare programs
○ National government would assume entire cost of Medicaid
○ Goal was never accomplished
○ States feared increase in cost of state government
● Military Spending Increase
○ Funded research into space-based missile shield system (Strategic Defense
Initiative or SDI)
○ Escalated arms race with USSR
○ Historians debate contribution to end of Cold War
● Increased Deficit
○ Tax cuts, increased military spending, and failure of New Federalism led to
increase in federal budget deficit
○ Government spending increased, government revenues shrank
○ Government had to borrow money
○ Congress blamed deficit on tax cuts
○ Reagan blamed Congress for refusing to decrease funding for social welfare
programs
○ Federal deficit reached record heights during Reagan administration
Foreign Policy Under Reagan
● Ending the Cold War
○ Supported repressive regimes and right-wing insurgents
○ U.S. military led international invasion of Grenada
○ Priority: support for Contras in Nicaragua
■ Contras known for torturing and murdering civilians
■ Congress cut off aid, Reagan administration funded through other
channels (Iran-Contra affair)
■ Constitutional crisis, debate over power of the purse and checks and
balances
○ Marines sent to Lebanon as part of UN peacekeeping force
■ Suicide bomb killed 240 servicemen
■ Eventual pullout of troops
● U.S.-Soviet Relations
○ Reagan's hard-line anticommunism initially led to deterioration in relations
○ Rhetorical war and escalated arms race
○ Adversaries eventually brought to bargaining table due to high cost
○ Gorbachev rose to power in Soviet Union
