Presidential Election 1980 Issues Iran Hostages Those Darn Russkies The Economy

Reagan Landslide

Election Results

The New Right "In this present crisis, government is not the solution to our problem; government is the problem.“ - Reagan’s inauguration speech

President Reagan given credit for bringing the hostages home January 1981

Dramatic Beginning

The Actor

California Cowboy

Reaganomics President Reagan’s Economic Plan

Economics The Social Science that analyzes the production, distribution and consumption of goods and services Economy System of production, distribution and consumption

Stagflation Stagnation Slow or no economic growth High unemployment Inflation High prices +

US Economy under Carter High interest rates High inflation OPEC’s oil embargo

Reagan’s economic solution Tax cuts Decrease – social spending Deregulation Increase – military spending

Supply-side economics How does it work? Supply creates its own demand Example: When Apple produces more ipads, the price goes down If the price goes down, demand goes up (more people will buy them) → Therefore, produce more to improve the economy More jobs, more money, more stuff

Trickle-down Economics More Production More JOBS = More Consumption More money moving around the system

The hike in defense spending, and vastly reduced tax revenues resulted in a skyrocketing federal budget deficit. Reagan’s goal to balance the budget by 1984 became infeasible.

Strategic Defense Initiative “Star Wars”

GDR West Germany Democracy Each person has a vote Individuality/Expression Rights Freedom of movement $ - Free Market economy Varies: wealthy, middle class, working class, poor Communism No voting (one party) State-run press/no expression Totalitarianism (Police state) Cannot leave $ - State controlled economy, Most are at the same level, NOT a good economy DDR East Germany

The Wall

Wiedervereinigungskater The hangover after reunification

Reactions in the US and Europe The United States A weakened USSR Democracy in Eastern Europe No opposition to a Unified Germany Europe Britain and France did not support reunification (Italy and the Netherlands agreed) Weak Soviets = no control over Germany Feared German aggression

The US and Germany NATO Trade EU – Germany keeps Britain and France from forming an alliance – German/US relations keep the US involved in Europe