Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What Was Reaganomics?

0
Posted

What Was Reaganomics?

0

The polite way to describe it is as a theory focusing on the effects of marginal tax rates on the incentive to work and save, with adjustments to policy yielding increases in output. The theory’s consequences for fiscal policy were described less politely (by, among others, the elder Bush) as “voodoo economics”: tax cuts without proportionately reduced expenditures, which in the short run necessarily produce very large deficits. Did the Reagan tax cuts produce an increased propensity to save? Nope. The U.S. savings rate fell from a high of 12 percent in 1982 to under 7 percent in 1989. In the longer run supply-siders assumed such deficits to be self-liquidating by way of increased tax revenues, which would result from the tax cuts acting as a stimulus to growth. Did the deficits shrink on Reagan’s watch? Nope. Over the long boom tax receipts nearly doubled, but the deficits ballooned. In our history, those ballooning deficits were not wholly self-liquidating. Bush increased taxes, Clin

0

Reaganomics refers to the economic policies of President Ronald Reagan during his presidency. By critics, the policy has been called trickle-down economics, the idea that investing in the top echelon of society, or cutting taxes to corporations, will be of economic benefit to all, allowing corporations to make more money, spark new growth, and thus hire more employees. There are several parts to Reaganomics. These can be summed up as reducing government spending, reducing regulation, reducing taxes, and controlling the money supply to reduce inflation. The ideas of Reagan, as is true of many Republicans, is that corporations are hampered with government intrusion. They can’t develop and reinvest in the economy as they should when they have to constantly face high taxes and numerous laws or government agencies that force their compliance on a number of issues. This is the laissez-faire or hands off policy, and the Republican Party’s sense that “bigger” government should be avoided. It i

0
10

Reaganomics was the sum total of economic policy undertaken by the Reagan Administration to address serious structural problems that had caused serious inflation, stagnantion of economic growth, and loss of competitiveness of American Industry. Some aspects of Reaganomics were already in the works when President Reagan took over, but he legitimized them, and made them stick. There were about 5 major facets of Reaganomics: They were: Reducing the Money Supply and keeping it tight to reduce inflation Reducing marginal tax rates, particularly on investments, to encourage investment in business Reduce government spending on wasteful or ineffective social programs Reduce regulations on businesses, to encourage efficiency and innovations Increase military spending, to address perceived deficiencies in the armed forces and to win the cold war. Military spending also ostensably would stimulate the economy by employing workers in defense industries.

Related Questions

Thanksgiving questions

*Sadly, we had to bring back ads too. Hopefully more targeted.