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
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