1. Ronald Reagan “The Great Communicator”

2. Conservatives vs. Liberals Conservatives Generally Republicans Favored limited government involvement in economy Rely on own national defense & actively fight Communism Liberals Generally Democrats Favored government involvement in economy (social programs) International diplomacy to combat Communism

3. Election of 1980: Carter v. Reagan Reagan: “Are you better off today than you were four years ago?” Reagan wins 489 to 49 The “Reagan Revolution” begins

4. Reaganomics Supply-Side economics Lowered taxes leads to increased spending Economic Recovery Act of 1981 Cut taxes by 25% Cut nearly $40 billion from federal budget Most from social programs Immediate Effects Recession from 1980-1982 Unemployment over 10% The number of poor people increased

5. Reaganomics….Yes there is More Deregulation Reduce gov’t control over industries Hurt banks in the future Budget deficit Amount of money spent and taken in by the gov’t $79 billion in 81’ to $221 billion in 86’ National debt Amount of money owed to owners of gov’t bonds Up to $2.5 trillion

6. Reaganomics Review

7. Iran-Contra Affair US sells weapons to Iran in exchange for Iran’s promise to pressure terrorist groups in Lebanon to release US hostages Contradicts Reagan’s policy of negotiating with terrorists US uses money from Iran to fund Contras in Nicaragua Contras: anticommunists in against Communist Sandinistas Congress refused to aid Contras Reagan’s aides still supported

8. Relations with USSR Strategic Defense Initiative (SDI) “Star Wars” Land and space based lasers would destroy missiles aimed at US Reagan wanted to end the Cold War by building up military Soviets could not afford to keep up