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

• 1981-1984- Doubled Defense Budget

• B-1 Bombers• Strategic Defense Initiative

– Would shoot down enemy missiles launched at the US

– Nicknamed Star Wars

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

• 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

SDI

Policy Why was it done?

What three major policy shifts made up Reaganomics?

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

Pros and Cons of deregulating the economy

Pros Cons

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

Sandra Day O’Connor

William Rehnquist

Antonin Scalia

Clarence Thomas

Anthony Kennedy

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

Geraldine Ferraro

Michael Dukakis

http://www.youtube.com/watch?v=BRPZQ3UEN_Q

Quiz 33.2

1. Reagan’s economic policy was called what?2. What was the nickname for the strategic defense

initiative?3. Who was the first woman appointed to the

Supreme court?4. Who did Reagan appoint Chief Justice of the

supreme court?5. ___________ was the first woman to appear on a

major party presidential ticket?