1. Ronald Reagan

2. Liberals vs. conservatives
Liberals-Democrats
Conservatives-Republicans
Change is helpful, should happen quickly, and must happen within the system (elections, new laws).
More government involvement is better.
Government should regulate the Econ
Government should help disadvantage Americans.
A diverse society is more creative and energetic
Oppose government support or endorsement of religious beliefs.
Social Liberal, Fiscal Conservative
Change is unnecessary--”we’ve always done it this way”. Change is slow if at all, to prevent change it happens within the system too.
Less government is better.
Government regulation creates less wealth and more poverty
Most social problems result from issues of morality and characters
Support original intent of the Constitution
Believe that religious faith is important in sustaining society.

3. Movement towards conservatism
Why the trend toward conservatism in the late 1970s?
High inflation (15% in 1979)
High taxes to support social programs
Civil Rights issues (bussing)
Three Groups that formed
New Right
Conservative Coalition
Moral Majority

4. Rise of Conservative Movement
New Right
against entitlement programs and affirmative action
Called for return to school prayer
Conservative Coalition
business leaders, middle class, disgruntled Democrats and fundamentalist Christians
Moral Majority
return to “traditional” moral values

5. Rise of Conservative Movement
National Rifle Association
originally created to promote marksmanship skills, became political and endorsed Reagan
Heritage Foundation
D.C. “think-tank” (non-profit lobbyist group) seeking to promote conservative policies

6. Four conservative goals
Shrink the federal government and lower spending
Promote traditional moral and values
Stimulate business by reducing government regulations and lowering taxes
Strengthen the national defense

7. Ronald Reagan
Former actor, Reagan used his affable style and humor to combat his enemies.
Reagan is the oldest person ever inaugurated
69 years old
70 days into office an assassin shoots and wounds Reagan.
Reagan’s approval rating sky rocket
After his recovery, he begins to implement the Conservative wish list
Reagan implements supply-side economics
Broad tax cuts
Support for businesses
Sometimes called “Reagan-omics”

8. Reaganonomics

9. Competing Economic theories
liberal
conservative
FDR
Demand-side (consumer)
Grow the economy from the bottom up
Government puts money into the economy
Government helps to create jobs
As lower and middle classes recover, spending will stimulate the economy
“Prime the pump”
Ronald Reagan
Supply-side (producer)
Grow the economy from the top down
Cut taxes, regulations, & government spending
Wealthy will invest in the economy
As demand increases, more supply will be needed.
“Trickle down”

10. Goals of Reaganomics Reduce Government Spending Cut Taxes
Reduce government regulation
Reduce inflation

11. Reduce Government Spending
Social programs
Social Security, Medicare and veteran pension not cut
Urban mass transit, food stamps, welfare benefits, job training, Medicaid, school lunches and student loans cut.
"Budget Deficit 1971 to 2001" by Pass Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons -

12. 1. Reduce Government Spending cont.
Military Spending
Defense Department budget almost doubled
Strategic Defense Initiative
Federal debt rose from around $99.4 billion to almost $2.9 trillion

13. 2. Tax Cuts Supply-side economics Lowered taxes after 1981
Cut taxes to wealthy individuals to incentivize them to create new business opportuinties
If they have more money in their pockets then they will reinvest it into business.

14. 3. Government Regulation
Cut federal entitlement programs
Deregulation
removed price controls for oil
eliminated federal health and safety inspections for nursing homes
deregulated airline industry and savings and loan industry
Cut EPA budget

15. 4. Reduce Inflation
Contracted money supply, dropped inflation from 13.5% to 3.2%

16. But... Contraction increased unemployment
Jump in interest rates contributes to recession