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REDUCTION OF BIG GOVERNMENT AND DEREGULATION, Cut 23,000 pages from the…
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Cut 23,000 pages from the Federal register to decrease federal intervention and regulation.
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Created a strike force to combat government waste and government fraud. This saved 2 billion dollars in the first 6 months of the presidency.
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Reagan's first days in office showed that he was caught up in the finer details rather than the overall rising debt. This was because his media narrative was to show the everyday changes.
-When smaller companies were struggling big companies would buy them out. This gave rise to conglomerates who would have a monopoly over the markets.
-Businesses were able to set their own physical and financial regulations that were often below that of the government.
-Even though deregulation initially brought about lower prices due to competition, as conglomerates became bigger they were able to set prices.
-Finally many companies tried to maximise profit and cut off many services. This made more rural areas suffer.
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Reagan deregulated banks and S and Ls.
When these restrictions were lifted banks could offer high rates of interest on loans.
This encouraged competition between firms and consumers had a wider choice.
Before deregulation S and Ls were safe with investments and offered mortgages with regular repayments. When they had to compete with deregulation they offered high rates on savings and low on loans.
Eventually, they failed as this was no longer feasible.
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IMPACT OF S AND L crisis.
1987 - Competitive equality in banking Act
by 1988 S and Ls had lost 10 billion
1989 the housing market collapsed.
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