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Reagan - Coggle Diagram
Reagan
Effect of Reaganomics
-cut welfares, widened the gap between black and white
-However, in Chicago and Philadelphia, black mayors were elected
Aims:
-reduce tax to encourage people to work harder and spend more
-reduce the size and role of the govt, cut public spending and minimize welfare payments
-reduce state and fed govt regulation
-strengthen the nations defences
Reagans Program for Economic Recovery
-cutting fed deficit
-deregulation of industry, state and local govt
-cutback 29% of regulatory staff
-supply-side economics, lower taxes deregulation would mean higher supply
-trickle down theory, more employment, more money to workers
How did he implement it?
-appointing sympathetic bureaucrats
-administrative action
-congress
-personality
Economic Recovery Tax Act 1981
-cut tax by 23% over 3 years
-rich went from paying 70% to 50%
-poor went from paying 14% to 11%
-rich benefitted
Failures:
-fed debt tripled from $990 billion in 1981 to $2.8 trillion in 1989
-govt spending wasn't lowered, increased spending by 2.5% each year
-easing of bank regulations created the Savings and Loan Crisis in 1989
Success:
-govt spending rate slowed
-eased bank regulations
-economy grew
-economic growth reduced unemployment in the long term
-inflation rates fell
'Big Govt' reduced
-fed govt was less interventional
-major laws unlikely to be passed
-affected the CRM as the govt was not intervening as much
-less central govt, less cases to Supreme Court, cases stayed in individual states
-hindered the successfulness of the NAACP
-black families less protected by the law
-hate crimes in newly integrated areas due to less laws protecting black people
Deregulation
-'big govt' limits freedom and opportunity
-public should have more power
-deregulation helps businesses which helps people (Trickle Down)
-New Federalism- power back to the states
-when small companies struggled, big businesses brought them
-big companies expanded, little companies failed
-initially brought lower prices through competition: however, big companies grew and set prices, eliminating competition
-rural areas suffered
-Savings and Loans collapse due to unregulated investments- banks went bankrupt
Acts:
-1981, Deregulation of Controls of Fuel Prices
-ST greater competition, lower prices sell more
-LT big businesses could fix prices=more expensive
-1981 Executive Order to stop wage and price regulation
-workers wages decreased, opened the gap between rich and poor
-more strikes
Weakness:
-smaller companies brought out by big companies
-small businesses struggled
-businesses set their own standards of safety and set them low
-big businesses set prices, eliminating competition
-many businesses cut services to maximise profit
-rural areas suffered
-deregulation proved expensive for tax payers (Savings and Loans collapse, $150 billion to bail out the collapse)
-led to govt debt
-added to the govt deficit
Success:
-Reagan achieved a reduction in the size and role of govt
-big businesses expanded
-deregulation initially brought lower prices
-employment rose by 11.5%
Free Trade:
-little govt intervention on trade
-lowered global tariffs and created the World Trade Organisation
Social Change
Minority Rights:
-black TV stars such as Oprah Winfrey and Michael Jackson flourished in Reagans presidency
-black celebrities still felt as though they were in a minority, being held back
-withdrew 40% of funding for bilingual education
-NAACP stated that Reagan was harming all minority groups
Welfare:
-Reagan wanted to cut govt expenditure and reduce the size of the govt so he decreased welfare
-Reagan believed that welfare decreased motivation
-believed that by reducing welfare, people will work more and boost the economy
Policies:
-Medicaid-
-Reagan slashed Medicaid expenditures by more than 18%
-Department of Health and Human Services budget was cut by 25%
-Fed funding for maternal and child health reduced by 18%
-medicare for the elderly was not cut
-Food Stamp Program-
-cut spending on this program
-made it harder for people to qualify for public assistance
-Food Stamp Act of 1985 required all states to implement job searches in order for people to qualify
-McKinney Act-
-set up fed emergency management and food shelters which gave emergency medical care to the homeless
-provided homeless with education and job training
Success:
-cut govt spending
-encouraged people to work
-medicare and social security remained intact, helping the disabled and elderly
-working families benefitted from lower taxes
-McKinney Act gave emergency aid to the homeless, educated them and provided them with job training
Weakness:
-poorest hit the hardest
-homelessness increased
-malnourishment and hunger became widespread due to cutting the Food Stamp
-many jobs were under minimum wage
-childcare hard to find so made it impossible for people to work
-workers had to work longer hours so had less leisure time
Revitalised
Presidency
-people less keen on fed withdrawal and deregulation when Bush came to power
-Democrats were back in control of congress, made it hard for Bush to push through his administration
-Clinton came to power (Democrat)
-didnt go back to Democratic policies
-voters supported Reagans low taxes
-Clinton created a new Democrat
-
US politics:
-Bush promised to continue Reagans policies but they became less popular when their long term consequences became clear
-Bush raised taxes (different to Reagan)
-Savings and Loans Crisis, govt had to intervene
-$150 billion spent on increasing regulation
-Clinton wanted to keep inflation low, high employment, reduced deficit, no tariffs to regulate business and trade
-Clinton did increase welfare and medical care