Reagan’s Domestic Policy

Key Terms

ReaganomicsFiscal ConservatismThe “New Right”Neoconservatives

I. Reagan’s Revolution

Fiscal Conservatism1. (http://www.allwords.com/word-fiscal+conservative.html) One who

favors a balanced budget, prefering spending cuts or tax increases to borrowing.

Reduce the size of the Govn’tSlash Taxes“Government is not the solution…

Government is the problem”

Reagan’s Revolution Cont.

Wanted a change from using tax money for federal “benefits”

Tax cuts of $35 MillionSupported by the “new right”1. Consisted of groups like the Catholic group “The Moral Majority”2. Focused on cultural concerns

Neoconservatives arose from the ideals of Reagan

1. Free-market capitalism2. Questioned welfare programs3. Harsh on Soviets

II. Budget

“Gut the budget”Got the left to agree to his tax cuts25% of cuts across the boardAugust 1981, Congress approved a huge tax

reform bill1. Lowered individual taxes2. Almost eliminated federal estate taxes3. Tax free savings plan for investors

III. PATCO

Professional Air Traffic Controllers Organization

They went on strike, threatened to completely shut down air travel

Reagan deemed it an illegal strike and fired all of them

This left jobs to managers, some controllers not affiliated with the strike, and mostly untrained new employees

PATCO cont.

Critics expected accidents, but when none happened Reagan was seen as a strong leader

This was a victory for Reagan but a great loss for unions

1. Businesses were less afraid and did not give into demands as easily, one of the things that hurt the economy in the 1970’s

IV. Supply-Side Economics

“Reaganomics”Believed that control over the budget would

promote growth.1. Stimulate the economy2. Good for business

Economy went into a depression1. Unemployment 11% (1982)2. Businesses shut down3. Banks failed

Supply-Side cont.

Only turned good results in 1983Caused larger gaps in the incomes of citizensValue of the dollar increased at this time as

well.

V. Social Legacy

He appointed almost half of the federal judges

Put 3 judges in the supreme courtUsed this in his fight against affirmative

action and abortion