American History

The Reagan Revolution

 

*By the end of the 1970s, a decade of social upheaval and economic stagflation had produced a sense of malaise in America.   Furthermore, ever since the New Deal, and certainly since the Great Society, there had come to be a greater and greater divide between American liberals (the left wing) and conservatives (the right wing).

 

*In general, an American liberal believes in the power of the government to improve society:  government regulation and government spending can fix society’s problems and help the poor, disabled, and groups that have been discriminated against.  However, this is expensive, leading either to high taxes or deep deficits.  Some people object to this, saying that it robs hardworking Americans to pay for projects they might not choose to spend their money on.  It also gives the government too much control over people’s lives.  Many liberals also tend to demand a strict separation of religion and politics, which upsets many religious people.

 

*In general, American conservatives believe in a small government and personal responsibility:  it is not the government’s job to fix society, but rather the job of each citizen to take care of himself.  They dislike the taxes, debt, and inflation that go with government spending (except for the military, as most conservatives feel that a powerful military is necessary to defend American liberties) and the fact that many people seem to end up dependent on the government for their living.  They also do not want to government telling people how to live—at least in most ways.  Many conservatives also believe that religion and traditional morality should play a large role in society and that government should take these beliefs into account when creating policies. 

 

*The union of religious and economic conservatives formed the basis of the New Right, as moral traditionalists rejected the counterculture and middle-class and wealthy Americans grew weary of government taxing and spending.  The silent majority was no longer silent, as Jerry Falwell formed the Moral Majority in 1979 to encourage conservative Christians to get out and vote.

 

*In 1980, Republican and Democratic conservatives of all types—religious, economic, libertarian—united behind a man who promised a small government, a strong military, and traditional morality: Ronald Reagan, a B-movie actor and California politician.

 

*This was called the Reagan Revolution.  By building on Goldwater’s conservative movement and Nixon’s Southern Strategy and appeals to the Silent Majority, it brought white Southerners and conservative Christians solidly into the Republican Party and let him beat Carter in a landslide in 1980.

 

*Reagan had asked voters if they were better off today than they were four years ago.  As president, he hoped to fix the economy through supply-side economics:  cutting taxes will allow corporations to increase investment and employment, thus enriching citizens (who would also grow richer as their tax rate was cut) and allowing them to spend more.  Furthermore, as people made more money, the government would get more taxes, because a lower percentage of a higher income level would generate more money.  Some people described this as trickle-down economics, Reaganomics, or voodoo economics (depending on how they felt about it).  In his first three years as president, he lowered taxes by 25%.

 

*Reagan also supported deregulation of businesses so that they could be more competitive (and thus profitable) since they had less government oversight.

 

*Despite these policies, there was a bad recession from 1980 to 1982 (with 10% unemployment in 1982), and Republican congressmen and senators did poorly in the 1982 elections.  However, by 1983 the economy had begun to turn around and the economy as a whole grew, although the number of poor Americans increased (partly due to immigration), while the wealthy saw their incomes grow most.

 

*Although Reagan promised that lower taxes would bring in more income for the government and he promised to cut government spending, it was not that simple.  While he did cut spending on some programmes, he increased military spending to keep up with the Soviet Union in a new arms race.  Furthermore, taxation did not keep up with spending, and the annual budget deficit more than tripled until the national debt was over $2.5 trillion by the mid 1980s (by the end of 2009 it will be almost $13 trillion).

 

*Two areas where Reagan was criticised for not spending enough money were on environmental protection (especially to combat air pollution that caused acid rain) and on AIDS research. 

 

*AIDS was first reported in the US in 1981, and at first was poorly understood and deeply stigmatised.  Some Americans wanted the government to sponsor medical research to find a cure (and expressed this through the creation of a giant memorial quilt, in which each square remembered an AIDS victim—today it has over 44,000 squares), but the government did not invest much in it.

 

*The economy also suffered from the deregulation of the Savings and Loan industry.  Some of them had executives who skimmed off millions of dollars, while others simply made bad loans, and over a thousand collapse.  In 1989 (right after Reagan left office), the US Government spent $200 billion to bail out depositors who had lost money when these Savings and Loan banks failed.

 

*Despite the deficit, the many Americans felt they were doing better by 1984 and voted for Reagan’s re-election.  Many admired Reagan’s positive attitude, even after the assassination attempt in 1981.  Furthermore, women appreciated his nomination in 1981 of Sandra Day O’Connor, the first woman on the Supreme Court.

 

*In Reagan’s second term, he began meeting with the new leader of the USSR, Mikhail Gorbachev, and began to negotiate a new reduction in tensions between the USA and USSR, which would eventually lead to an end to the Cold War.



 
This page last updated 3 December, 2009.