Reaganomics

Quick Facts: Who was Reaganomics?

Subject:

Reaganomics

Known for:

Neoliberal economic policies emphasizing deregulation, tax cuts, and reduced government spending.

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2Day Chrono-Wiki & Primary Historical Archives

Origins & Early Life

Reaganomics ( ; a portmanteau of Reagan and economics attributed to Paul Harvey), or Reaganism, were the neoliberal economic policies promoted by Ronald Reagan, president of the United States from 1981 to 1989. These policies focused mainly on supply-side economics. Opponents (including some Republicans) characterized them as "trickle-down economics" or Voodoo Economics, while Reagan and his advocates preferred to call it free-market economics. The pillars of Reagan's economic policy included increasing defense spending, slowing the growth of government spending, reducing the federal income tax and capital gains tax, reducing government regulation, and tightening the money supply in order to reduce inflation. The effects of Reaganomics are debated.

Career & Major Achievements

Supporters have pointed to the end of stagflation, stronger GDP growth, and an entrepreneurial revolution in the decades that followed. Critics have pointed to the widening income gap, what they described as an atmosphere of greed, reduced economic mobility, and the national debt tripling in eight years which ultimately reversed the post-World War II trend of a shrinking national US debt as percentage of GDP. Prior to the Reagan administration, the United States economy experienced a decade of high unemployment and persistently high inflation (known as stagflation). Attacks on Keynesian economic orthodoxy as well as empirical economic models such as the Phillips Curve grew. Political pressure favored stimulus resulting in an expansion of the money supply.

Enduring Legacy & Impact

President Richard Nixon's wage and price controls were phased out. The federal oil reserves were created to ease any future short term shocks. President Jimmy Carter had begun phasing out price controls on petroleum while he created the Department of Energy. Much of the credit for the resolution of the stagflation is given to two causes: renewed focus on increasing productivity and a three-year contraction of the money supply by the Federal Reserve Board under Paul Volcker. In stating that his intention was to lower taxes, Reagan's approach was a departure from his immediate predecessors.

Chronological Milestones & Life Events

1. 1981: 1981 Milestone — Reaganomics ( ; a portmanteau of Reagan and economics attributed to Paul Harvey), or Reaganism, were the neoliberal economic policies promoted by Ronald Reagan, president of the United States from 1981 to 1989.

Historical Fact-Check Quiz: Reaganomics

True or False: “The national debt as a percentage of GDP remained consistently low throughout the entire Reagan presidency.”

Answer (FALSE ❌): The federal deficit as a percent of GDP was noted to be up throughout the Reagan presidency, reversing the trend of shrinking US debt relative to GDP.

Contemporary Figures & Related Historical Timelines

• Abel Gance — Historical peer (Died in 1981) (1981): French cinematic pioneer, celebrated for his mastery of montage and epic filmmaking.
• Abigail Spencer — Historical peer (Born in 1981) (1981): American actress, producer, and writer known for roles in soap operas and dramas.
• A. J. Ayer — Historical peer (Died in 1989) (1989): Influential English philosopher known for logical positivism and emotivism.
• Abbie Hoffman — Historical peer (Died in 1989) (1989): Iconic American activist, co-founder of the Yippies, and counterculture figure.

Frequently Asked Questions about Reaganomics