Reaganomics
Facts for kids
The following fact
sheet contains interesting facts and information on Reaganomics.
Reaganomics
Facts for kids
Reaganomics
Facts - 1: The economic
theory behind Reaganomics was called supply-side or
trickle-down economics with monetarism.
Reaganomics
Facts -
2: The economic
theory behind supply-side economics was to boost
production, meaning the "supply" of goods and services,
to encourage economic growth.
Reaganomics
Facts - 3: The theory behind monetarism
was to control the supply of money as the chief method of
stabilizing the economy by providing tax cuts for investors creating
incentives to save and invest, producing economic benefits that
would "trickle down" into the overall economy.
Reaganomics
Facts - 4: The term "Reaganomics" was
coined by Paul Harvey, an American radio broadcaster for the ABC
Radio Networks, and a supporter of Ronald Reagan.
Reaganomics
Facts - 5:
The economic phenomenon of the 1970's, referred to as 'Stagflation',
was characterized by high inflation and stagnation. Inflation meant
that Americans were getting less for their money than they used to
be able to get. Economic stagnation had resulted in a prolonged
period of slow economic growth, accompanied by high unemployment.
Reaganomics
Facts - 6: The Nixon, Ford
and Carter administrations introduced numerous and often
conflicting economic policies to combat Stagflation, but
these had all failed.
Reaganomics
Facts - 7: When the conservative President
Ronald Reagan was elected in 1981 he was faced with the
onerous task of fixing the U.S. economy. He needed to
succeed where his predecessors had failed.
Reaganomics
Facts - 8: In his 1981 Program for Economic
Recovery, President Reagan had four major objectives:
● To reduce income tax and
capital gains tax, but still keep the budget deficit
under control
● To reduce the growth of
government spending by cutting programs
● To reduce government
regulation by eliminating price controls and
deregulating industries
● To control the growth of the
money supply in order to reduce inflation
Reaganomics
Facts -
9: The effect of the four major changes
in the 1981 economic policy were expected to:
● Create incentives, such as
tax cuts, that would increase investment and saving
● Increase output and economic
growth and reduce unemployment
● Balance the budget
● Restore financial markets,
and reduce interest rates
Reaganomics
Facts - 10: President Reagan
issued his first executive order 12287 for the Decontrol
of Crude Oil and Refined Petroleum Products to address
gasoline rationing. This eliminated price controls on
oil and natural gas. Production soared, and the price of
oil declined by more than 50% releasing money which
helped economic recovery.
Continued...
Reaganomics
Facts for kids
Facts
about Reaganomics for kids
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Reaganomics
Facts for kids
Reaganomics
Facts - 11: Deregulation:
Reagan began to slowly reduce economic regulation. The
flagging automobile industry was boosted when the
National Highway Traffic and Safety Administration
reduced its demand for higher fuel efficiency.
Reaganomics
Facts - 12: Deregulation: The
government decided not to regulate the new cable TV
industry. Plans to regulate long-distance telephone
services, interstate bus services and ocean shipping
industries were also abandoned.
Reaganomics
Facts - 13: Deregulation: The
airline industry was also deregulated which resulted in
cheaper air fares and the establishment of new airlines.
Reaganomics
Facts - 14: Deregulation:
Controversial policies were implemented in relation to
the environment as public lands were released for
mining, timber and oil industries and regulations were
eased on pollution control.
Reaganomics
Facts - 15: Deregulation: The
scope of the antitrust laws was reduced and banks were
allowed to invest in a wider set of assets.
Reaganomics
Facts - 16: U.S. federal tax
legislation: The Economic Recovery Tax Act of 1981 (ERTA)
was signed on August 13, 1981 and contained numerous
provisions intended to help individuals and businesses
in the Reaganomics tax plan.
Reaganomics
Facts - 17: Cutting Taxes:
Income taxes on the wealthiest Americans were cut from
70% to 50% to 28% during his two terms in office. The
corporate income tax rate was reduced from 48% to 34%.
Virtually all the poor were exempted from federal income
taxes, by almost doubling personal exemptions.
Reaganomics
Facts - 18: Improvements to
highways and bridges were essential to the U.S.
transportation system. The Highway Revenue Act of 1982
January 6, 1983, temporarily increased the United States
gasoline excise tax from 4 cents to 9 cents through
September 30, 1988 to support improvements to highways
and bridges.
Reaganomics
Facts - 19: Investment
Incentives: The tax cuts had large investment incentives
in the form of accelerated depreciation, that were
gradually reduced in each subsequent year through to
1985
Reaganomics
Facts - 20: Off Setting Tax
Cuts: To off set the tax cuts a small increase in Social
Security tax rates were made and some excise tax rates
were increased.
Reaganomics
Facts - 21: Tax Legislation:
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
was passed to increase tax revenue by eliminating
various taxation loopholes and introducing tougher
enforcement procedures in collecting taxes.
Reaganomics
Facts - 22: Tax Legislation:
Congress later passed the Tax Reform Act of 1986 (TRA)
on October 22, 1986 to simplify the income tax code and
eliminate many tax shelters.
Reaganomics
Facts - 23: Cutting Social Programs: The
cuts in taxes resulted in the government receiving less money and
would increase the budget deficit. This problem was addressed by
making cuts to some welfare benefits and social programs. school
lunch programs were cut back as were food stamps. Reductions were
also made to unemployment compensation, Medicare payments, housing
subsidies and student loans.
Reaganomics
Facts -
24: By 1983 the U.S. economy finally
began to recover and the economic crisis known as
Stagflation came to an end.
Reaganomics
Facts -
25: The biggest
failure of Reaganomics was the inability to reduce the
federal deficit and control spending. During the whole
period of Reaganomics and its new economic polices
President Reagan had made the decision to build up the
US military. This, together with the tax cuts, was seen
by Reagan as more important than balancing the budget
and as a result the annual budget deficit increased from
$80 billion to over $200 billion.
Reaganomics
Facts -
26: The adoption of
the economic policies known as Reaganomics resulted in
many successes. By 1988 productivity had increased by
3.8%. The unemployment rate had fallen from 7% in 1980
to 5.4% in 1988. 5 million new businesses and 20 million
jobs were created. The inflation rate fell from
10.4% percent in 1980 to 4.2% in 1988.
Reaganomics
Facts for kids
Reaganomics - President Ronald Reagan Video
The article on Reaganomics provides detailed facts and a summary of one of the important events during his presidential term in office. The following
Ronald Reagan video will
give you additional important facts and dates about the political events experienced by the 40th American President whose presidency spanned from January 20, 1981 to January 20, 1989.
Reaganomics
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Interesting Facts about Reaganomics for kids and schools
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Summary of Reaganomics in US history
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Reaganomics, a major
event in US history
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Ronald Reagan from January 20, 1981 to January 20, 1989
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Fast, fun facts about Reaganomics
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Domestic
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