1. Reagan’s 1 st Term  Election of 1980 concerns: U.S. has fallen into a mood of depression.  Causes:  1. 1960s – Vietnam war, distrust of government, social changes  2. 1970s – Watergate, Carter seemed powerless against Soviets and Iranian Hostage situation, gasoline prices soared

2. New Political Movement  People were tired of being controlled by foreign countries.  People thought Carter was blaming the people for the problems in the 1970s.  Conservative Movement – opposed liberal social and racial policies.  Opposed abortion rights, forced busing to achieve school desegregation, welfare and affirmative action.

3. The 1980 election  Reagan (69 yrs old) platform – return to simple times, less government, stronger military and conservative moral values.  Reagan will win by a landside. G.W. Bush will be his V.P.  Republicans controlled the senate for the 1 st time since 1955.  Iranian hostage situation will end after a couple of hours after Reagan was announced president.

4. Reagan Revolution  New Right – wanted major reversal in liberal government, economic, and social policies.  Wanted school prayer, lower taxes, smaller government, strong military, and teaching the Bible account of human creation.  Opposed gun control, abortion, homosexuality, school busing, Equal Rights Amendment, affirmative action and nuclear disarmament  Started to grow with Televangelism – led by Jerry Falwell.

5. Powerful Personality  Reagan was known as the “Great Communicator”  Would gain support from democrats  Some democrats were tired of their own political party stands on racial and social issues.

6. Reagan’s Agenda  In his 1 st months as president got almost everything he wanted.  Tax cuts, eliminated some social programs, reduced the budget, and increased military spending.  Reagan even started anti drug campaign led by his wife Nancy Reagan – JUST SAY NO!

7. Reagan’s economic plan  “Reaganomics” – 2 goals  1. reduce taxes to stimulate economic growth.  2. cut the federal budget  Based on the economic theory of supply-side economics.  Tax cuts and business incentives stimulate investments.  Investments encourage economic growth.  This would help eliminate budget deficit – the amount by which the government spending for a year exceeds government income.  Many people thought this would help the rich get richer and that the tax breaks would not trickle down to the middle class.

8. Recession and recovery  1981 and 1982 – the nation suffered the worst recession since the Great Depression.  Unemployment rose, government revenue plunged.  Federal spending soared – military spending  Federal budget skyrocketed – did not have the tax money to pay for the increased spending.  Federal Reserve raised interest rates – this made it hard for businesses to borrow money to expand.  1983 – reserve dropped their high interest rate, OPEC lowered gas prices – this lowered inflation  The economy started to grow like crazy – however favored the wealthy.  Congress still had to deal with a budget crisis – had to put the breaks on federal spending with the Balanced Budget & Emergency Deficit Control Act.  Required mandatory budget cuts to curb the deficit.