Reaganomics

Reaganomics refers to the President Ronald Reagan economic policies. It is important to understand that President Ronald Reagan stayed in power as the United States President between 1981 and 1989.  He became the first conservative president in over half a century. President Reagan made his first task to deal with the effects of the Great Depression and the recession that had hit the country. The situation influenced the Reagan Revolution. As a plan to initiate economic improvement, its focus revolved around the reduction of government spending, inflation reduction, regulations, and taxes. President Reagan believed that government could not serve as the solution to a problem. However, it had the position of a problem. President Reagan believed in an economy that supported capitalism and free market developments.

After the elections in 1981, Reagan took an economy from the previous president that was mired in stagflation. The economy experienced a double-digit economic contraction combined with a high level of inflation. To fight the looming recession, the situation pushed the newly elected president to develop some appropriate incentives that would propel the country to another level. The incentives focused on changing the situation through positive incentives. The situation also saw President Reagan cutting the corporate tax rate to 34% with a margin of 14% from its initial phase. At the time before his ascent to power, the Federal Reserve Board stabilized the economy through short-term interest rates. However, 1981 had seen the interests reaching its peak (Niskanen and Cato Institute 3-5). President Reagan also promised the voters that he would slow the growth of government expenditure.

President Reagan had to deregulate business industries. The American economy experienced Federal Reserve establishing strategies that were meant to combat inflation through the reduction of the money supply. Despite the four major incentives introduced by the government of President Reagan, others did not see the light of day concerning their success. The discussion of the paper revolves around the details of the incentives created by President Reagan and their effectiveness. They discuss the various impacts they had on the citizens in the United States.