What was “Reaganomics”? Describe the difference in the state of the U.S. economy from when Reagan took office in January of 1981 until he left in January of 1989. Was this change a positive change? Explain
Reaganomics was a conservative approach to economic policy which occurred with Reagan being elected president. It no longer relied on the Keynesian theory of tax cuts to boost consumer demand. Instead, it used a supply-side strategy that cut both government spending and taxes, which allowed the private sector to invest in the economy and shape it to their needs, generating economic growth and jobs. Reaganomics focused on cutting critical social spending and eliminating the welfare state, with a safety net being created for those truly in need. In turn, military spending was increased dramatically. Reagan effectively acted upon popular support of the public, primarily excited about significant tax cuts (Moss and Thomas 2012, 232-234).
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When Reagan took office in 1981, the economy was experiencing years of stagnation with high inflation as well as high unemployment. The interest rate was at its peak in 1981. Reaganomics was ineffective at first, leading to the highest unemployment rates since 1941 and a significant government budget deficit. Interest rates caused homes and cars to become too expensive for many Americans. Inflation showed a downward tendency as the only positive indicator.
However, by the second term, Reagan slightly shifted monetary policy which led to economic recovery. Inflation dropped below 4% and unemployment stabilized around 6% (Moss and Thomas 2012, 238). Tax revenues also began to increase exponentially which despite a budget deficit was able to mitigate any economic crises. Reaganomics is believed to have brought on one of the most prosperous periods of the US economy as all positive indicators grew by several times and many new jobs were created.
What is a “Go-Go” economy? Was the U.S. economy in the 1980s a “Go-Go” economy? Explain
Go-Go economics is a term which describes rapid and active development characterized by economic growth. It is a period of significant investments, revenue, and expansion of business and financial operations. Economists consider these periods to occur approximately every half a century as there seems to be endless growth during a Go-Go economy. However, such active growth can be dangerous as it is usually followed by a steep recession and near-zero growth with radical shifts in political and economic orders and policies (“The mysterious death of the go-go economy” n.d.).
The 1980s would not be considered a Go-Go economy as there was significant instability in the earlier years of the decade with the adoption of Reaganomics. As growth increased towards the end of the decade there were a number of troubling economic trends such as Wall Street mismanagement and misrepresented financial deals as well as large purchases of US property from foreign investors and transfer of US production overseas leading to global interdependence.
The deregulation of the savings and loan industries led to a number of high-risk operations. Furthermore, some regions such as the Midwest experienced deteriorating economic conditions (Moss and Thomas 2012, 241-242). Overall, the Go-Go period of rapid growth did not begin until the latter years of the decade and the term can be applied to the 1990s rather than the 1980s.
Who were the “Culture Warriors”? Assess their impact on the U.S. during the 1980s
Culture Warriors was a movement, primarily conservative, which was propagating far-right ideologies. For example, that America was experiencing moral decline and that liberal causes were at fault for dividing the country with marginalizing cultural changes (Moss and Thomas 2012, 268). Culture warriors were primarily active in the 1990s but had their roots in the 1980s as conservative ideologues such as Reagan took office and gained popular followings.
The 1980s technological breakthroughs allowed people to experience popular culture through new forms of media. Television became more readily available along with a video cassette recorder (VCR). The main broadcasters saw competition from private cable channels which could cater to particular ideologies. Computers began to see at-home use. Culture warriors clashed in all aspects of popular media and vital cultural discussion topics such as sexual freedoms and drug use.
The Right often saw popular media as detrimental to American values, particularly in advertising sexual promiscuity and abortion. As Americans began to become exposed to these important issues through media, it had real-life consequences. Republicans which took office under Reagan significantly stifled pro-choice and abortion supporting legislation and groups. Furthermore, with the emergence of the AIDS epidemic, the homosexual community was stigmatized while the Reagan administration did little to address it. These aspects had profound social impacts on the U.S. for the next decade (“Culture Wars of the 1980s” n.d.).
What was the Iran Contra scandal? What effect did it have on politics and society in the U.S.? Explain
The Iran-Contra Affair was an international political scandal which occurred in 1986. Information emerged that the Reagan administration was conducting secret negotiations with Iran concerning the release of American hostages in Lebanon in exchange for arms sales to Iran.
The deal was further scandalous because the Attorney General discovered that the funds from weapon sales to Iran were redirected to Contra rebels in Nicaragua which was strictly prohibited by Congress passed legislation. Therefore, this violated two laws: the sale of weapons to Iran which was under embargo, and the financing of rebels in Nicaragua. Reagan vehemently denied any involvement in the matter, directing blame to Oliver North of the National Security Council who was the primary subject dealing with the matter (Moss and Thomas 2012, 257).
The scandal was in large more impactful than Watergate, severely damaging U.S. foreign policy. Many American allies such as Saudi Arabia felt betrayed by the weapon shipments to forces destabilizing the Middle East. Meanwhile, domestically, there was a public condemnation of secret operations which violated the will of Congress, public opinion, and ultimately broke the law. The scandal caused a Constitutional crisis of sort as Reagan’s administration violated an important principle of checks and balances by circumventing a Congressional ban. After Reagan was out of office, many of the involved officials were put on trial and sentenced for numerous felonies including conspiracy, fraud, and perjury, although President Bush eventually pardoned all participants.
Describe the impact of the Rehnquist court. How did their rulings affect American society? Explain
Over the course of his presidency, Reagan appointed over 400 federal judges, including Sandra Day O’Connor, Antonin Scalia, and a new chief justice William Rehnquist. These judges had a profound involvement in driving Reagan’s policy, swinging many decisions in a conservative direction. It led to the removal of some rights from those accused of crimes as well as putting limits on affirmative action (Moss and Thomas 2012, 244).
Rehnquist court sought to restrain a rapid liberalization which was ongoing during the preceding Warren Court, but it was not blindly conservative. Rehnquist court attempted to take into consideration the public sentiment in the U.S. and was notable for its collaboration amongst Democrats and Republicans after Bill Clinton appointed two moderate judges. Most of the judges were notable legal scholars and independent from political pressures.
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Their rulings had significant impacts on American politics and society. As previously mentioned, the court declared affirmative action or preferential treatment based on race as unconstitutional. Death penalties became more popular and inmates could no longer appeal multiple times postponing the execution. Religion was allowed to have a more vital role in politics, taxes, and education as long as a state religion was not established. Finally, its biggest impact was the promotion of federalism which gave states more rights at the expense of the federal government. The Rehnquist court often ruled against the federal government and put significant restraints on power (Healy 2016).
“Culture Wars of the 1980s.” n.d. Lumen Learning. Web.
Healy, Thomas. 2016. ” A Supreme Legacy.” The Nation. Web.
Moss, George D., and Evan A. Thomas. 2012. Moving on: The American People Since 1945 (5th ed.). London: Pearson.
“The Mysterious Death of The Go-Go Economy.” n.d. Pearson. Web.