|
Ronald Reagan
Ronald Reagan, one of the most popular presidents of the twentieth century, took office during a particularly
complex time. Although the long imprisonment of American foreign service personnel by the government of
Iran loomed large in the public’s eye, the economic state of the nation was the deciding factor in providing
Reagan with a decisive margin of victory over the Democratic incumbent. The value of the dollar had decreased
about thirty percent in the previous four years. Wages had risen, but not as swiftly as prices, and wage
earners were driven into higher and higher income tax brackets. The Social Security fund lost value that
had to be made up by increased personal taxation. Interest rates rose to twenty percent and even higher,
and millions of Americans found themselves out of work. Looking back, one can see that during this painful
period the real value of the national debt had decreased by one-third, and many of the deferred costs
of the Cold War were settled by the impersonal and universal tax imposed by inflation.
Reagan came into office convinced that the situation could be remedied by the proper combination of lower
government expenditures, lower taxes, and a more effective allocation of national resources. George Bush,
Reagan’s opponent in the Republican primaries, had branded Reagan’s financial proposals as "voodoo
economics," and such they seemed to be. Reagan had expected that the lowering of taxes would stimulate
the economy, create jobs, lower welfare costs, and result in increased revenues. This never quite happened,
and federal expenditures exceeded revenues at an increasing rate as the United States began a new round
in the arms race with the Soviet Union. This last round succeeded; the Russian economy collapsed, but
the American economy was itself in sad disarray.
When Ronald Reagan left office, the national debt was three times greater than when he had entered it,
state and local taxes had increased to fund functions that had been shifted to them from the federal government,
and the United States had become the world’s greatest debtor nation. Dwight Eisenhower’s warning against
mortgaging the nation’s future resources seemed more prophetic than ever. Nevertheless, Reagan seemed
to have been untouched by all of this, as well as by the numerous scandals and abuses of power that had
marked his administration. He left office as popular as he had entered it.
What importance did Reagan claim to place on the national debt? What was his stated policy on welfare
programs, and did he make any exceptions to his general policy? How did the president justify increased
military spending while trying to reduce the deficit? How did he and his advisers claim decreased federal
taxes would actually increase federal revenues? What did Reagan announce the primary goals of his administration
to be?
|
