Transcript RAH Day 34 `09 Agenda reaganomics and foreign policy

RAH Day 34 Agenda
Goal – to understand how Ronald Reagan was both similar to and different
from previous presidents. To understand how his views of economic
policy differed from others and the effects these policies had.
• Complete p 8 re: Reagan’s policies
• Review PSSA preparation reading activity packet p 9 and 10 by reading
pages 11-16 about the Reagan Administration’s view of government and
the economy.
• Complete p 20 – analyze the cartoon about Reagan’s policies – answer the
attached 3 questions
• Complete p 22 and 23 about social situation and foreign policy under
Reagan and Bush 41
• Complete p 24 and 25 about the middle east
From Hype to Fear
Paul Krugman – New York Times, Jan 7, 2008
Not to put too fine a point on it, Barack Obama won his impressive
victory in Iowa with a sunny, upbeat message of change.
But there’s a powerful political faction in this country that
understands very well that any real change will create losers as
well as winners. In particular, any serious progressive reform of
health care, let alone a broader attempt to reduce middle-class
insecurity and inequality, will have to mean higher taxes on the
affluent. And members of that faction will do whatever it takes to
scare people into believing that change means disaster for the
economy.
p 8 - Conservative Policies Under Reagan and Bush -
Goal: stimulate economy
Reaganomics
Method: cut gov’t spending on social programs and lowered income taxes
Result: Slashed poverty programs like Women, Infant and Child (WIC)
program cut even though 22% of all US children lived in poverty, cut school
lunch program and student loans.
No spending on AIDS research until after 1986
Massive Tax cuts for the rich - top tax rate decreased from 70% in 1980 to
50% in 1982 to 28% in 1988 while the tax rate for the median income
1980 – 28%, 1982 - 29%, 1988 – 28%
Gap between rich and poor got wider, cities got poorer
Little change in SS & Medicare
Recession until 1982, then significant GDP growth to 1989, decrease in
inflation, increase in jobs, wages, and confidence in economy
Massive increase in national debt and federal government yearly deficits,
Trade deficit
1.
2.
3.
4.
5.
6.
7.
Reagan’s solutions to the above problems
Supply-Side economics = Reaganomics
Cut gov’t spending, especially entitlement programs
Cut taxes, especially on businesses and the wealthy
Simplify the depreciation schedule
Cut business regulations including environmental enforcement
Improve monetary policy
Promote confidence in the US
Keynesian policy
Cut and limit government activity related to business
Government
$$$ - welfare, jobs,
housing subsidies, food
stamps
Producer/supplier of
goods and services
Consumer of goods
and services
1.
2.
3.
4.
5.
6.
7.
Reagan’s solutions to the above problems
Supply-Side economics = Reaganomics
Cut gov’t spending, especially entitlement programs
Cut taxes, especially on businesses and the wealthy
Simplify the depreciation schedule
Cut business regulations including environmental enforcement
Improve monetary policy
Promote confidence in the US
Cut and limit government activity related to business
Supply side policy
Government
Business tax
cuts, investment
tax cuts,
Producer/supplier of
deregulation,
goods and services
lower interest
rates
Trickle
$$$
Down
Consumer of goods
and services
p 8 - Conservative Policies Under Reagan
and Bush
Goal: stimulate economy
Method: increase spending on military
Result: new weapons systems like MX nuclear missile, the B-1 longrange bomber
Plans for the Strategic Defense Initiative SDI otherwise known as Star
Wars
Huge budget deficits and national debt increases
Goal: promote traditional values and morality
Method: naming conservative judges to federal judiciary
Results: overturned or weakened laws about abortion (but it remained
legal today), affirmative action, civil rights for women, criminal rights
and discrimination protections (especially for gays and women)
Other methods – pushing for tougher laws against drugs, indecency
p 8 - Conservative Policies Under Reagan
and Bush
Goal: reduce the size and power of federal gov’t
Method: deregulate savings and loan industry (and other
industries)
Results: huge screw up in the S and L industry leading to massive
bankruptcies of these institutions and the FSLIC bailout of over
$200 billion
Increases in mergers and acquisitions leading to massive new
companies but also new innovations and competition leading to
lowered prices and better products
Method: cut EPA
Result: severe decrease in environmental prosecutions, increased
logging, grazing and mining and sale of public lands leading to
increased pollution and habitat loss
Mean (average) family income in current 2005 $ – Piketty and Saez (2006)
compared average income
38,000
37,000
income in 2005 $
36,000
35,000
average income in 2005 $
34,000
33,000
32,000
1979
1980
1981
1982
1983
1984
1985
1986
year
1987
1988
1989
1990
1991
1992
bottom quintile mean income
15500
15000
14500
14000
bottom quintile mean income
13500
13000
12500
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
12000
Bottom Quintile Mean family income -current 2005 $ – US Census Bureau CPS
2nd quintile mean income
34000
33000
32000
2nd quintile mean
income
31000
30000
29000
19
91
19
89
19
87
19
85
19
83
19
81
19
79
28000
2nd Quintile Mean family income -current 2005 $ – US Census Bureau CPS
middle quintile mean income
19
91
19
89
19
87
19
85
19
83
middle quintile mean
income
19
81
19
79
53000
52000
51000
50000
49000
48000
47000
46000
45000
44000
43000
42000
3rd Quintile Mean family income -current 2005 $ – US Census Bureau CPS
4th quintile mean income
19
91
19
89
19
87
19
85
19
83
4th quintile mean
income
19
81
19
79
76000
74000
72000
70000
68000
66000
64000
62000
60000
58000
4th Quintile Mean family income -current 2005 $ – US Census Bureau CPS
top quintile mean income
160000
140000
120000
100000
80000
60000
top quintile mean
income
40000
19
91
19
89
19
87
19
85
19
83
19
81
19
79
20000
0
Top Quintile Mean family income -current 2005 $ – US Census Bureau CPS
top 5% mean income
250000
200000
150000
top 5% mean income
100000
50000
19
91
19
89
19
87
19
85
19
83
19
81
19
79
0
Top 5% Mean family income -current 2005 $ – US Census Bureau CPS
Comparing Quintiles Mean family income in current 2005 $ – US Census - CPS
comparative mean income by quintile
lowest 20%
200000
2nd 20%
middle 20%
150000
4th 20%
100000
top 20%
top 5%
50000
0
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
current 2004 $
250000
year
Nations
Key people
Events
trends
USSR
Mikhail Gorbachev
Boris Yeltsin
Perestroika,
Glasnost, START,
INF, Fall of USSR
Democratization,
capitalism, failure of
communism, warming
of relations
Poland
New constitution,
fall of communism
Democratization,
capitalism
Germany
Fall of Berlin wall
Reunification
Democratization
Yugoslavia
Slobodan Milosovic Balkanization and
2 civil wars
Democratization,
capitalism, genocide
China
Deng Xioaping, Li Tiananmen Square
Peng
Economic reform
Strengthening
authoritarianism,
capitalism, GDP growth
Nicaragua
Somoza, Ortega,
Civil war, CIA
chamorro, contras, activities, aid to
Sandanistas
contras, Boland A.
Democratization,
Nations
Key individuals
events
Trends
Panama
Noriega, Bush
drug dealing
War on drugs,
Invasion of panama, yankee imperialism
arrest of Noriega
Iran
Ayatollah Khomeini,
Reagan, Ollie North,
Larry Walsh
Iran-Iraq War,
Lying to Congress,
Hostages & civil war law breaking,
in Lebanon, trading hypocrisy
guns for money for
hostages
Iraq
Saddam Hussein,
GHW Bush, Colin
Powell, Norman
Schwartzkopf
War with Iran,
War and mistakes
money and weapons
for Hussein, war
against Iraq
$
$
Locations of CIA covert operations to overthrow unwanted
leftist governments
median married family income
40,000
income in current 2004 $
35,000
30,000
25,000
20,000
Series1
15,000
10,000
5,000
0
1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
year
Median family income in current 2005 $ – US Census Bureau Current Population Survey