The New Outlook of the Reagan Years Chapter 21 Section 2

The Farmer’s Dilemma: Feast or Famine  Expensive equipment made possible gains in productivity on large and medium-sized farms.

 The decline of the small family farm was closely linked to the mechanization of farms in the 20 th century.  Farmers with small farms, who could not afford such equipment, found that they could not compete.  By 1995 most farm acreage was controlled by large agricultural corporations.

Farm Subsidies  Ever since the Great Depression, the federal government had paid subsidies to farmers to help them survive years when crops brought low prices.  (A subsidy is a grant of money from the government to a private enterprise.)

Feast in the 1970s  Farmers are always subject to sudden changes in the world demand for their crops.  Theirs is a business of either feast (high demand, high prices) or famine (low demand, low prices).  The 1970s were largely a boom time for American farmers.

 Prices for farm products were high partly because of increased exports to the Soviet Union and other nations.  Encouraged by the federal government, farmers borrowed money to modernize farms and increase production.  They made spectacular gains in productivity.  In 1972 one American farmer produced enough to feed 53 people; by 1982 the same farmer could feed 78 people.

Famine in the 1980s  Farmers became the victims of their own success.  When the world demand for their crops declined, they were left with millions of tons of unsold grain and received low prices for the rest.  Contributing to the lower prices was an embargo on the sale of grain to the Soviet Union done by Jimmy Carter when Russia invaded Afghanistan in 1979.

 Farmers now faced high debts and declining income.  Thousands of family farms went bankrupt.

 In order to help farmers, President Reagan initiated two programs in the 1980s.  The first program was called “Payment in Kind” (PIK).  Farmers were paid in surplus crops held by the government for not planting on their land.  Hoped it would reduce the oversupply that had led to reduced prices for farm products.

 A second program was made part of the Food Security Act of  Again, in return for not planting crops on their land, farmers would receive payments from the government to help protect them from financial loss.  Both federal programs provided aid to farmers at a difficult time, but increased the federal deficit.  In the 1990s, exports of grain again helped to increase farm income.

Poverty in an Affluent Society  After World War II, most Americans lived comfortably on incomes high enough to sustain an affluent, or prosperous, lifestyle.  Even so, there was still millions of Americans who lived in poverty.  In the 1980s, increasing numbers of homeless people slept in bus terminals and makeshift shelters on the streets of major cities.

 Increased poverty was one cause of two other trends: an increase in the crime rate and an increase in the school dropout rate.  In the 1980s, an inexpensive addictive drug, crack, worked its way into poor urban neighborhoods.  Drug use, drug wars, and crime made life more difficult for millions living in U.S. cities.

 In 1981 President Reagan argued that government programs to reduce poverty were not the solution but part of the problem.  He believed that financial aid to all expect the “truly needy” caused the poor to be permanently dependent on government funds.  Many Americans, concerned about high taxes and budget deficits, supported the president’s efforts to cut back on federal programs for the increasing numbers of homeless people.

 Reagan’s critics blamed his cuts in welfare programs for the increasing numbers of homeless people.  But some social scientists argued that the poor might represent a permanent “underclass” in American society and that no amount of government aid could effectively deal with the program.

The “New” Immigrants  The “new immigrants,” as they were called, did not come from Europe.  They came instead from Asia and Latin America.  At the same time, immigrants from areas of turmoil (the Soviet Union, Eastern Europe, and Iran), as well as immigrants from India and Pakistan added to the large number of new arrivals.

Immigration Act of 1965  No more than 20,000 from any one country  No more than 120,000 from countries of Western Hemisphere (Canada and Latin America)  No more than 170,000 from countries of the Eastern Hemisphere (Asia, Africa, Europe, and Australia)  Preference given to skilled workers and professionals and to those with family ties to U.S. citizens.

Illegal Immigrants  In addition to the millions of “new new immigrants” admitted legally, there were millions of others who crossed the U.S. Mexican border illegally.  Facing high unemployment and poverty in Mexico, they escaped detection as they waded across the shallow Rio Grande.  U.S. employers were often glad to hire them for low wages.

 U.S. labor unions feared that the illegal Mexican aliens would undercut American workers by taking jobs for less than the minimum wage.  Illegal aliens did not pay taxes, and yet because of their numbers they placed a strain on city services and added to the cost of city government.  To permit illegal immigration to continue would be unfair to those other immigrants who had to wait patiently for years to gain lawful entry to the United States.  Immigrants who took the test to become citizens felt that it was unfair for the illegal immigrants to be living here and not take the citizenship test.

Immigration Reform and Control Act of 1986  Enacted with President Reagan’s approval, the Immigration Reform and Control Act of 1986 placed heavy fines on employers who knowingly hired illegal aliens.  At the same time, the law permitted illegal aliens who had entered the United States before 1982 to remain here as legal residents.

Is illegal immigration still a problem today in the United States? What can be done to help reduce the flow of illegal immigrants?

 New immigrants contributed to the U.S. economy by purchasing goods and services and paying taxes.  They also protect the U.S. from future labor shortages, and their diverse cultures enrich American society.

Changing Demographic Patterns  America’s increasingly elderly population is politically powerful because it has a strong commitment to protecting Social Security Organizations such as AARP and the Grey Panthers lobby for increased Medicare benefits and cost-of-living increases from Social Security.

 Economically, the large numbers of older workers makes it difficult for younger people to find employment, except in high- tech fields like computer science.

 In addition, many baby boomers are feeling the double economic burden of sending their children through college, while at the same time caring for elderly parents.