President Reagan

Catherine Cain: chapter 41

Election of Reagan

Election of 1980

  • Republican- Ronald Reagan- WON

    • 489 electoral votes

    • 43,901,812 popular votes

  • Democrat- Jimmy Carter

    • 49 electoral votes

    • 35,483, 820 popular votes

Reagan won over basically ALL of the electoral votes except 49


Election of 1984

  • Republican- Ronald Reagan- WON

    • 525 electoral votes

    • 54,455,000 popular votes

  • Democratic- Walter F. Mondale

    • 13 electoral votes

    • 37,577,000 popular votes

Reagan won over even MORE of the electoral votes than the previous election- he only missed 13


Issues/Concerns over National Budget

1980= deficit reached nearly $60 billion

  • Americans lived on fixed incomes → elderly & workers w/o strong union → suffered from shrinking dollar

major goal of Reagan: reduce size of government by shrinking federal budget & cutting taxes

Proposed new federal budget -- called for $35 billion cuts

  • mostly in social programs


Tax cuts- amounted to 25% overall reductions over 3 years

  • August 1981- congress approved set of tax reforms

    • lowered individual tax rates

    • reduced federal estate taxes

    • created new tax free saving plans for small investors


“supply-side economics”: economic theory of Reaganomics- emphasized cutting taxes & gov spending→ stimulate

  • new investment

  • boost productivity

  • promote economic growth

  • reduce federal deficit


economy slipped into deepest recession since 1930s: unemployment ^ & banks closed → people blamed Reagan for this


“Reagan Recession” of 1982-- actually caused by initiatives of Federal Reserve Board 1979


1983-- healthy economic recovery came BUT

  • income gaps widened between rich & poor (1st time in 20th century) → symbolized by “yuppies” (young, urban professionals w/ considerable amount of $$$)

    • poor got poorer

    • rich got richer

    • middle class stagnated


Economic upturn-- massive military expenditures (gave Pentagon nearly $2 trillion in 1980s) → government went into MAJOR deficit

Reagan & Cold War

Reagan Strategy dealing w/ USSR-- enormous expansion of US military capabilities → give ability to threaten USSR w/ new round of arms race ($$$$$)


US economy able to bear financial strain > USSR


March 1983-- Reagan announced intention pursue Strategic Defense Initiative (SDI) aka Star Wars

  • high technology missile-defense system

  • plan: called for orbiting battle satellites in space that could fire last beams to vaporize intercontinental missile on liftoff

  • emphasized DEFENSE


1981- gov Poland- popular movement of working people organized into massive union called “Solidarity”--> clamped martial law on country -

  • relations w/ USSR worsened

  • US → imposed economic sanctions on Poland & USSR


September 1983- - Korean passenger airliner shot down when flew into USSR airspace- 100s of civilians (including Americans) plummeted to death into Sea of Okhotsk


End of 1983-- all arms control negotiations were broken & Cold War intensified

Iran-Contra Imbrogilo

Reagan had 2 foreign policy problems

  1. continuing captivity of # of US hostages

    1. seized by Muslim extremist groups in Lebanon

  2. Continuing grip of power of left-wing Sandinista government in Nicaragua

    1. Reagan kept requesting from Congress to provide military aid to contra rebels against Sandinista regime → but Congress kept refusing

Iran-Contra Affair

  • unknown to US public-- some officials saw possible linkage to 2 problems of Middle East hostages & Central American Sardinists

  • Happened

    • 1985-- American diplomats secretly arranged arms sales to embattled Iranians in return for Iranian aid in obtaining release of American hostages held by Middle Eastern terrorists (at least one was eventually set free)

    • Meanwhile $$ from payment for arms → diverted to the contras “freedom fighters” in Nicaragua

    • actions - were NOT approved or known about w/ congress or president

    • November 1986-- ignited firestorm of controversy

    • Hearing held

      • criminal indictments

        • Lt. Col. Oliver North -- convictions reversed on appeal

        • Adm. John Poindexter --- convictions reversed on appeal

        • Caspar Weinberger -- got presidential pardon

    • Reagan in lose-lose situation

      • If he did know of this scheme → would appear he circumventing Congress to aid Contras

      • If he didn't know of it (which he didn't) → appeared he didn't know what was going on

      • tainted his record in foreign policy

Reagan's Economic Legacy

Reagan took office vowing to stimulate US economy by

  • rolling back gov regulations

  • lowering taxes

  • balancing budget

    • through→ supply-side economics (promised lowering taxes would increase gov revenue bc stimulate economy as a whole)


Combination of tax reduction & LARGE increase of military spending caused $200 billion in annual deficits → shows a great economic failure



early 1990s- median household income actually declined


BUT- economic deficits served their purpose: containment of the welfare state