Preview

Econ 545 Project Paper

Best Essays
Open Document
Open Document
1934 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Econ 545 Project Paper
THE GLOBAL ECONOMY
PROJECT PAPER 2

By

Team F

Submitted in Partial Fulfillment of the Course
Requirements for

Business Economics
ECON545
Professor

The US Economy in 1982-2000

Introduction

Throughout the late 1970s, American people had grown discontent with the government’s fiscal and monetary policies as the economy was stagnant and recovery was not in sight. This ultimately led to the election of former actor and California governor, Ronald Reagan in 1980. President Reagan’s economic policy was based in the theory of supply-side economics, which promotes the reduction of taxes to stimulate spending and investment. Additionally, he made cuts to social programs as he believed that government had become too big and intrusive. Next, the President also increased defense spending out of concern that the country had neglected its military after the Vietnam War. This combination overwhelmed the small reductions in other domestic programs and ultimately led to an increase in federal budget deficit even higher than the levels seen in the Carter administration; recovery stagnated once again.
The effects of a slow economy show in the unemployment rates. We can observe the table shown below, that even after the economy is recovering, the unemployment rates are still higher than before the recession began. This can be due to the accumulation of the unemployed during the previous year of recession.

U.S. Unemployment Rates Month-by-Month for the Period 1978-1984 | Year | Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec | 1978 | 6.4 | 6.3 | 6.3 | 6.1 | 6.0 | 5.9 | 6.2 | 5.9 | 6.0 | 5.8 | 5.9 | 6.0 | 1979 | 5.9 | 5.9 | 5.8 | 5.8 | 5.6 | 5.7 | 5.7 | 6.0 | 5.9 | 6.0 | 5.9 | 6.0 | 1980 | 6.3 | 6.3 | 6.3 | 6.9 | 7.5 | 7.6 | 7.8 | 7.7 | 7.5 | 7.5 | 7.5 | 7.2 | 1981 | 7.5 | 7.4 | 7.4 | 7.2 | 7.5 | 7.5 | 7.2 | 7.4 | 7.6 | 7.9 | 8.3 | 8.5 | 1982 | 8.6 | 8.9 | 9.0 | 9.3 | 9.4 | 9.6 | 9.8 | 9.8 | 10.1 | 10.4 | 10.8 | 10.8 |

You May Also Find These Documents Helpful

  • Good Essays

    Ronald Regan begins his first term of presidency in 1981, Regan who took charge of the white house was facing a country with a deteriorating economy. Regan had a clear plan in mind in reconstructing past policies in order to improve the current state of the country by executing “Reaganomics”. Reaganomics is an economic policy that reduces taxes on the upper-income brackets that would boost the investment and economic growth. Under this policy, it has not only controlled the inflation but has brought in a greater number of investors which certainly created more jobs for the people hence a higher employment rate in the country. Although, policies in the Great Society spending has cut down, however, policies such as Social Security and Medicare…

    • 153 Words
    • 1 Page
    Good Essays
  • Good Essays

    During Reagan’s presidency from 1981-1989, he was able to accomplish many things such as boosting the economy, strengthening national defense, and reducing the power of the federal government. When the economy was in its worst recession since the Great Depression, Reagan decided to cut taxes and government spending on social programs; however the tax cuts mostly helped the rich and cutting welfare hurt the poor. On the other hand, his deregulation, domestic spending restraint, and tax cuts helped lead to an economic boom that lasted two decades. Reagan was still able to eliminate many deductions and exempt millions of people with low incomes. He was also able to slow the pace of inflation. The supply-side economics…

    • 305 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    When Ronal Reagan took office the economy was at a low with high interest rates and inflation at the highest since the 1940s. Reagan vowed to cut taxes, increase defense spending, and balance the budget. President Reagan’s economic policies would come be known as Reaganomics. He promised to protect programs such as Medicare and Social Security while cutting the outlays for social programs by targeting waste, fraud, and abuse (National Archives and Records Administration, n. d.). Reagan’s policies were based on supply-side economics where tax cuts for the wealthy and business would trickle down to the poor.…

    • 201 Words
    • 1 Page
    Satisfactory Essays
  • Better Essays

    Reagan was particularly beleaguered when unemployment rose to a staggering 9.5%. He dreaded that he would not be re-elected. Presidents Reagan’s goal was to execute economic policy dubbed ‘Reaganomics’. This policy aimed at stimulating America’s economy through tax credits, accelerated depreciation, and tax cuts. Reagan’s core catalyst to attain this goal was the enactment of the ERTA (Economic recovery Tax Act) in 1981. The ERTA brought in phased-in cuts in marginal duty levels that were extensive. ERTA, however, was a too far bridge and failed despondently creating huge budget deficits as well as weakening America’s economy. This resulted in an economic slump that lasted through the better part of 1982. Luckily, Reagan saw the fault, and with enactment of TEFRA (Tax Equity and Fiscal Responsibility Act) in late 1982. America’s economy embarked on a path to recovery. TEFRA acted as ERTA’s remedy. In fact, it came to be known as the most extensive peacetime tax rise to be ever enacted in the history of America. Ironically, Reagan, a Republican, had signed the bill. TEFRA began presumably the most considerable bull series in the economic history of America. This cycle lasted for close to half a decade. Reagan deserves much of the credit for endorsing TEFRA and particularly, for its great economic outcome. However, few people recognize that it was Peter Stark, a Democrat, who backed TEFRA. Worth noting is the fact that Reagan played a very instrumental role by joining forces with fellow Democrats. The TEFRA perhaps explains why Reagan was reelected for a second…

    • 1412 Words
    • 6 Pages
    Better Essays
  • Better Essays

    Reagan vs Obama

    • 1356 Words
    • 6 Pages

    Before Regan took office in 1981, the state of the United States economy was in dismal shape. The high unemployment of mid 1970’s seemed to be on the way down, but because of an unnaturally low Federal Reserve’s interest rate, inflation was out of control. By the time Reagan got into office, the unemployment rate in the country had increased from a low of 5.8% to 7.6% in 1981. Although the country was experiencing an increasing unemployment rate, the inflation rate was skyrocketing above 14% for multiple months in 1980. The Federal Reserve had to increase interest rates in order to control the value of the dollar, at the cost of millions of jobs. Although the inflation rate decreased from an average of 13.58% in 1980 to 3.22% in 1983, the unemployment rate rose from the higher interest rate from 7.1% in 1980 to 9.7% in 1982. This huge increase in the amount of unemployed naturally caused a sharp decline in Reagan’s approval ratings. In 1984, Reagan’s election year, the economy began crawling back. Unemployment dropped from 9.7% in 1982 to 7.5% in 1984 and American’s began to believe in Reagan’s ability to help the economy thrive. Reagan’s economic success is credited to the tax cuts he enacted. During the 1970’s the federal tax rate for wealthy making over $200,000 a year was at or over 70% for the entire decade. Reagan’s cuts lowered the amount of taxable income from 70% (for the highest earners) to 50% in 1982. This increase in money allowed the wealthy to invest more and hire more workers, leading to the recovery that began in 1984.…

    • 1356 Words
    • 6 Pages
    Better Essays
  • Good Essays

    One of the most significant factors of Ronald Reagan’s first, few months in office was his courageous effort to transform the country’s economic policies. Reagan’s administration created a policy called “Reaganomics”, or “trickle-down” economics, which sought to cut taxes for the upper, middle, and lower classes to stimulate the economy. He reduced taxes to return the wealth to the working middle class. Instead of handing…

    • 681 Words
    • 3 Pages
    Good Essays
  • Good Essays

    The annual increase in spending by the federal department declined from 4.0% (during carters reign) to 2% during Reagan’s reign. The defense department saw major spending awarding major government contracts to upgrade the nation’s defense systems even proposing a space-based missile defense system. President Reagan however did not make any substantial changes to social security and Medicare but significant reductions in domestic programs were proposed. These changes in economic policies were found to be favorable to the economy although disappointing in comparison to what was…

    • 753 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Bonus: Ronald Reagan’s fiscal policies Many believe that Ronald Reagan is one of the best conservative presidents in United States history. Reagan (February 6, 1911-June 5, 2004) was the 40th president of the United States from 1981-1989. He originally was a member of the Democratic Party, but due to the parties’ shifting platforms during the 1950’s, switched to the Republican Party in 1962. Out of the many things Reagan was famous for, he was notorious for his implementation of supply-side fiscal policy. Ronald Reagan soon made supply-side economics a phrase known by very household, and while promising an all around reduction in income tax rates and an even bigger reduction on capital gains tax rates.…

    • 496 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Econ Paper #1

    • 1103 Words
    • 4 Pages

    Number of Microwaves sold elasticity= .25(5,000/17,650) = .07. The product is inelastic in regards to the number of microwaves sold. The product sales will be relatively the same regardless if the number of microwaves sold changes.…

    • 1103 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Reaganism And Policies

    • 128 Words
    • 1 Page

    In the 1980’s Reagan achieved success through his policies to transform American government and politics. These policies went on to guide the political and social system we find today. The 1980’s was at a period in which when important economic policies in the United States had vanished almost a decade ago from commercialism post World War II. That was the time of restoration and development for economy in the U.S and the rest for the world to repair from the desolation caused by the war.…

    • 128 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    CARLSON sales analysis

    • 1077 Words
    • 8 Pages

    When looking at Carlson department store sales data, the last four months beginning September 1996 to September 1999 shows an increasing total sales, 10.55, 10.75, 11.05 and 11.95 respectively. It can therefore be inferred from the data that, the last four months forms 39% of annual Carlson’s department store total sales. The implication is, 61% of sales occurred in the first 8 months of each year beginning 1996 to 2000. Based on this, we can estimate total sales for year 2000 to be 32.21 had there been no hurricane.…

    • 1077 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    This study aims to identify some of the macroeconomic variables and analyze the impact of these variables on the demand and supply of Toyota automobile vehicles in the U.S. The paper includes four to five years historical data of these variables accumulated and samples for this analysis. This analysis will also look at the long term correlation of these variables with Toyota car sales. Results shows that a slowdown in U.S income growth could short-circuit the surge in consumer spending including the sales of vehicles manufactured by the U.S automotive manufacturers, such as Toyota Motor Corporation…

    • 2540 Words
    • 12 Pages
    Powerful Essays
  • Satisfactory Essays

    Solutions 10-8-18

    • 455 Words
    • 2 Pages

    We will calculate the sum of the returns for each asset and the observed risk premium first. Doing so, we get:…

    • 455 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    pub ad papers

    • 31794 Words
    • 128 Pages

    Public Administration Previous Years’ Papers: 1979 Public Administration (Mains) UPSC Question papers Last 34 years [1979 to 2012] Index 1979 ................................................................................................................................................ 2 1980 ................................................................................................................................................ 5 1981 ................................................................................................................................................…

    • 31794 Words
    • 128 Pages
    Satisfactory Essays
  • Good Essays

    | This article 's factual accuracy may be compromised due to out-of-date information. Please help improve the article by updating it. There may be additional information on the talk page. (August 2012)…

    • 4472 Words
    • 18 Pages
    Good Essays