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Reaganomics

As far as domestic government policy goes, Reagan was against it, saying that "Government is not the solution to our problem. Government is the problem." Although he didn't succeed in making the federal government much smaller, he did what he could to turn back the clock on government regulations.

Reagan's first Secretary of the Interior eased environmental regulations on polluting industries and favored opening wilderness areas and shorelines for oil and gas leases. When air-traffic controllers went on strike, Reagan fired them.

His economic policies were called Reaganomics (1982) or supply-side economics; less government was supposed to mean more growth in the economy and, almost magically, more tax revenue. Tax cuts under Reaganomics mostly succeeded in making more money for the wealthy. The economy actually grew at a slower rate during the Reagan administration than the post-World War II average. To the credit of Reagan's administration, the interest rate policy of the economists he appointed helped bring inflation, which had soared under Nixon and Carter, back under control. Reagan also won applause by appointing the first woman to the Supreme Court.

Example

Question: What was the most noticeable effect of Reaganomics?

Answer: It got more money for rich people.

A growing trade deficit

During the Reagan administration, the U.S. went heavily into debt and ran an international trade deficit of billions of dollars a year. Neither of these trends has stopped since the Reagan period; addiction to foreign oil and imported consumer products has made the U.S. spend far more overseas than it takes in from exports.

This discrepancy is called the balance of payments (1986) problem. The U.S., which in the first half of the 20th century was the master of international business, became the world's largest debtor nation beginning in the 1980s.

 
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