Reagan’s Economic Policies

• When Reagan was elected in 1980, he sought to implement conservative economic reforms– These reforms depended on the “Trickle-Down” theory in which

assistance provided to the wealthy would improve the economy as a whole and, eventually, “trickle down” to the poor

– Reagan’s economic policies, called Reaganomics, consisted of three parts:• Budget Cuts

– Reagan’s goal was to reduce government spending– Particularly targeted social welfare programs that aided the poor, left those that

helped the middle class mostly alone• Tax Cuts

– Reduced taxes by 25% over a three year period– Most tax reductions went to those with high incomes– Felt that reducing tax rates would boost the economy so much that actual

government income would not drop• Increased Defense Spending

– The budget for the Defense Department doubled in Reagan’s first term– Pushed the Strategic Defense Initiative (SDI), popularly known as “Star Wars,” whose

goal was to shoot down enemy ICBM’s

Unemployment

Guiding Question: Were Reagan’s economic policies effective?

• Look at the graph of unemployment rates and come up with a main idea to answer the guiding question

Debt

Guiding Question: Were Reagan’s economic policies effective?

• Look at the graph of debt as a percentage of GDP and come up with a main idea to answer the guiding question

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 19950%

10%

20%

30%

40%

50%

60%

70%

Debt as a Percentage of GDP

Per Capita Income

Guiding Question: Were Reagan’s economic policies effective?

• Look at the graph of per capita income and come up with a main idea to answer the guiding question

Income by Class

Guiding Question: Were Reagan’s economic policies effective?

• Look at the graph of income growth by economic class and come up with a main idea to answer the guiding question

SCR Practice

Guiding Question: Were Reagan’s economic policies effective?

• Write a topic sentence to answer the guiding question

SCR Practice

Guiding Question: Were Reagan’s economic policies effective?

• Write a conclusion to answer the guiding question