Reagan’s Economic Policy

As President, Ronald Reagan encountered many significant events; from surviving an assassination attempt, to the space shuttle Challenger disaster. Perhaps the most significant event was the economic downturn. He came to office (much like President Obama) in the midst of an economic crisis; however, President Reagan was able to turn the economy around. How did he do this? In order to answer this question, you must first ask what the economy was like when he was sworn into office, how his policy changed from the prior administration’s policy, and how it contrasts our present economic policy.

Prior to Reagan’s inauguration the country was suffering from double-digit inflation, high interest rates, high unemployment, oil shortages, and slow economic growth. American was suffering from years of expanding government from the previous administration that possessed a budget deficit of $66 billion. The government had grown to a disproportional size and needed a diet.

On January 20, 1981 President Reagan gave his inaugural address. In his address he first and foremost addressed the economic problems that America needed to face. He says, “Economic ills have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away.” He goes on in saying “In the present crisis, government is not the solution to our problem; government is the problem.” His economic policy is often coined with the word Reaganomics. He devised a plan that would reduce the growth of government spending, reduce marginal tax rates on income from labor, reduce government oversight on the economy, and control the supply of money to reduce inflation.

In order for Reagan to give the U.S. a booster shot, he needed t...

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... trillion and counting. By contrast, the total U.S. debt at the end of Reagan’s second term was 1.0 trillion. What does all of this mean?

The verdict is still out. America is almost three years into this economic down turn. It is too soon to call the current administration’s economic policy a failure. However, if it does get worse, it might be time to use Reagan’s economic policy, even if just for a little while.

Works Cited

Reagan, Reagan. An American Life: The Autobiography. New York: Simon and Schuster, 1990.

Skinner, Kiron. Reagan In His Own Hands: The Writings Of Ronald Reagan That Reveal His Revolutionary Vision For America. New York: The Free Press, 2001.

Government Track (2008). Economic Stimulus Act of 2008. Budget Report. Retrieved June30, 2010, from http://www.govtrack.us/congress/billreport.xpd?bill=h110-5140&type=cbo