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33.2- Conservative Policies Under Reagan and Bush. Lesson Objective: To Understand the programs and policies of Presidents Ronald Reagan and George Bush. Essential Question: How did Conservative philosophy change government policies and priorities?. Key Terms. Reaganomics
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33.2- Conservative Policies Under Reagan and Bush Lesson Objective: To Understand the programs and policies of Presidents Ronald Reagan and George Bush Essential Question: How did Conservative philosophy change government policies and priorities?
Key Terms • Reaganomics • Supply-side economics • Trickle-Down Economics • Strategic Defense Initiative • Trade imbalance • Sandra Day O’Conner • William Rehnquist • Geraldine Ferraro
Reaganomics • Define: • Cut government spending- $40 Billion • Mostly in domestic programs • Cuts made in programs that benefited smaller interest groups while leaving larger entitlement groups alone • Tax Cuts • Reduced taxes to increase private investment • This would increase the nations supply of goods & services • Supply-side economics • Define: • Became known as Trickle-Down Economics- Why?
Military Spending National Debt Rose from $900 Billion in 1980 to $4 Trillion in 1992 Interest payments made up 21% of Federal expenditures Reduced money for investment in infrastructure and technology among others • 1981-1984- Doubled Defense Budget • B-1 Bombers • Strategic Defense Initiative • Would shoot down enemy missiles launched at the US • Nicknamed Star Wars • Trade Imbalance • Define • US dollars were going to other countries • However US companies had to improve their products to compete with foreign competition • To address deficit and debt Reagan raised taxes in areas other than income (payroll, etc..). Also implemented more simplified tax code eliminating lots of loopholes and breaks
An Improving Economy • Inflation dropped 10% by 1988 • Recession in 1982 • Economic growth in 1983 driven by consumer spending and investment • GDP increased 10% • Increased consumer confidence • But… • Tax revenues were not as high as expected had to borrow money- ran high deficits • Stock Market Crash in 1987 • Market quickly recovered
Deregulating the Economy • One of Reagan’s goals was to reduce the scope of the federal government-mainly by reducing regulations on business • What would be positive effects? Negative ones? • Increased competition and resulted in lower prices for the consumer • Sometimes regulation completely stopped- or just transferred the responsibility to local and state governments • Without regulation the Savings and Loan industry collapsed and billions of dollars were lost • Seriously reduced funding to the EPA and allowed businesses to operate with significantly less oversight
Judicial Appointments • During the 1960s and 1970s what major cases did the Supreme Court Rule on? Were the judges conservative or Liberal? • Reagan (and Bush) were able to appoint numerous judges to the Supreme Court and other federal courts - 50% by end of their terms • Made Supreme court much more conservative: • Sandra Day O’Connor • Antonin Scalia • Anthony Kennedy • William Rehnquist- Chief Justice • Clarence Thomas • Made much more conservative rulings on a variety of issues
Elections of 1984 and 1988 • Reagan Coalition • Business people • Southerners • Westerners • Reagan Democrats • Why? • 1984- Reagan and Bush defeat Mondale (Carter’s VP) and his Vice presidential candidate Geraldine Ferraro. • Reagan wins every state but Minnesota and DC • 1988- Bush runs against MA Governor Dukakis • “read my lips: no new taxes” • Wins 53% of vote and 426 electoral votes
Quiz 33.2 • Reagan’s economic policy was called what? • What was the nickname for the strategic defense initiative? • Who was the first woman appointed to the Supreme court? • Who did Reagan appoint Chief Justice of the supreme court? • ___________ was the first woman to appear on a major party presidential ticket?
