What Are The Effects Of Ronald Reagan's Fiscal Policy
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. In the United States, commentators started to place …show more content…
supply-side economics along side with Reaganomics. Reagan’s fiscal policies were largely based on supply-side economics. During Reagan's 1980 presidential campaign, the major economic concern was a dual digit inflation, which Reagan stated to be "Too many dollars chasing too few goods", but rather than the normal amount of secure money, layoffs and recessions, with their consequent loss of wealth and production, he promised the nation a gradual and painless way to deal with inflation by "producing our way out of it”.
Although many Americans liked and agreed with Reagan’s supply-side fiscal policy, many critics would say otherwise. Critics claim many major effects were caused by Reagan’s fiscal policies. As an example, in 1991 the Democrats on the Joint Economic Committee of Congress(JECC) released a report titled "Falling Behind: The Growing Income Gap in America," which accuses the victims of ‘Reaganomics' were the least affluent Americans. The report came to conclusion that "families in the lowest forty percent of the income distribution actually had lower real incomes on average in 1989 than they did in 1979.” Another negative effect caused by Reagan’s fiscal policies was that the savings rate did not rise in the 1980s. Supply-side predicted that the national savings rate would indeed increase. In fact, in the 1980s the personal
savings rate fell from a moderate 8 percent to staggering 6.5 percent. In the 1990s the average savings rate has fallen even further to a well below average of 4.87 percent. One of the last major negative effects of Reagan’s fiscal policy was that the Federal Reserve, not Reagan, needs credit for ending the era of high inflation during the 1970s. An unknown critic once quoted that “One man is more responsible for the political success of the Reagan presidency than any other, and his name is not Ronald Reagan. It is Paul Volcker, the man Jimmy Carter appointed as chairman of the Federal Reserve Board. A relatively stable currency has been the basis . . . for the economic boom of recent years. . . .”.
On the other hand, many proponents claim that most of Reagan’s work created positive effects throughout our nation. Reagan’s tax cuts increased federal revenues significantly between 1980-1990; amounts to a 25 percent increase in revenues.
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. In the United States, commentators started to place …show more content…
supply-side economics along side with Reaganomics. Reagan’s fiscal policies were largely based on supply-side economics. During Reagan's 1980 presidential campaign, the major economic concern was a dual digit inflation, which Reagan stated to be "Too many dollars chasing too few goods", but rather than the normal amount of secure money, layoffs and recessions, with their consequent loss of wealth and production, he promised the nation a gradual and painless way to deal with inflation by "producing our way out of it”.
Although many Americans liked and agreed with Reagan’s supply-side fiscal policy, many critics would say otherwise. Critics claim many major effects were caused by Reagan’s fiscal policies. As an example, in 1991 the Democrats on the Joint Economic Committee of Congress(JECC) released a report titled "Falling Behind: The Growing Income Gap in America," which accuses the victims of ‘Reaganomics' were the least affluent Americans. The report came to conclusion that "families in the lowest forty percent of the income distribution actually had lower real incomes on average in 1989 than they did in 1979.” Another negative effect caused by Reagan’s fiscal policies was that the savings rate did not rise in the 1980s. Supply-side predicted that the national savings rate would indeed increase. In fact, in the 1980s the personal
savings rate fell from a moderate 8 percent to staggering 6.5 percent. In the 1990s the average savings rate has fallen even further to a well below average of 4.87 percent. One of the last major negative effects of Reagan’s fiscal policy was that the Federal Reserve, not Reagan, needs credit for ending the era of high inflation during the 1970s. An unknown critic once quoted that “One man is more responsible for the political success of the Reagan presidency than any other, and his name is not Ronald Reagan. It is Paul Volcker, the man Jimmy Carter appointed as chairman of the Federal Reserve Board. A relatively stable currency has been the basis . . . for the economic boom of recent years. . . .”.
On the other hand, many proponents claim that most of Reagan’s work created positive effects throughout our nation. Reagan’s tax cuts increased federal revenues significantly between 1980-1990; amounts to a 25 percent increase in revenues.