Reagan Economic policies


Reagan Economic policies


  • Inflation dropped from 13% in 1981, and to 3.5% in 1988
  • Unemployment decreased
  • The economy expanded
  • There was an increase in personal wealth and GDP growth
  • The stock market boomed
  • Output per worker per hour increased -> productivity!


  • 1981-82 there was a recession
  • More people worked part-time -> maybe unemployment did not decrease
  • Wages did not rise
  • Increased spending on defence
  • The richest 1% controlled 40% of the nation's wealth - double 20 years before
  • Middle class incomes stagnated
  • The poorest 20% incomes declined
  • Hospitals for the mentally ill were all closing = homelessness
  • Savings and loan crash - deregulated banks had S&L borrowing from each other with risky investments = went bust


Reagan did reach some his aims (control the $ supply, de-regulate and cut personal/business tax)However, he did not cut the deficit, and instead spending was $2.6 trillion in 1988.


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