1970’s

Oil Crisis Yom Kippur War Oil Crisis –Imported 33% of our oil –OPEC (Organization of Petroleum Exporting Countries) – embargo Impact –1974 – embargo lifted when Israel withdrew from occupied territory Auto makers in trouble

Ford’s Presidency OPEC continues to limit exports, driving prices up, creating shortages Chief issue: inflation – prices go up and value of dollar decreases WIN (Whip Inflation Now)

Carter Adminstration Causes of Economic downturn –energy shortage –Companies got big and did not respond well to changing technology Stagflation Spending on social programs increased creating a 72 billion dollar deficit by Top tax bracket 70% –Discussed lowering taxes, but doesn’t do anything Energy alternatives failed

Supply Side Economics Lower taxes = more money in pockets More money in pockets = increased spending/investing increased spending/investing = economic growth economic growth = more earnings for Americans

Reaganomics Reduce Growth of Government spending. Reduce Income Tax and Capital Gains Tax. –Top tax bracket – 28% Reduce Government regulation. Control the money supply to reduce inflation IRAs Deficit spending