Editing Ronald Reagan (section)

==="Reaganomics" and the economy===
{{Main|Reaganomics}}

Reagan advocated a ''[[laissez-faire]]'' philosophy,{{sfn|Karaagac|2002|p=113}} and promoted a set of [[neoliberal]] reforms dubbed "Reaganomics", which included [[monetarism]] and [[supply-side economics]].{{sfnm|1a1=Li|1y=2013|1p=221|2a1=Gerstle|2y=2022|2p=150|3a1=Roy|3y=2012|3p=155}}

====Taxation====
{{Missing information|section|analysis|date=November 2023}}
[[File:President Ronald Reagan addresses the nation from the Oval Office on tax reduction legislation.jpg|thumb|alt=Reagan addressing the nation from the Oval Office on tax reduction legislation, 1981|Reagan outlining his plan for tax cuts, 1981]]

Reagan worked with the [[boll weevil Democrats]] to pass tax and budget legislation in a Congress led by [[Tip O'Neill]], a liberal who strongly criticized Reaganomics.{{sfnm|1a1=Cannon|1y=2001|1p=100|2a1=Pemberton|2y=1998|2pp=99–102}}{{efn|Despite their various disagreements, Reagan and O'Neill developed a friendship across party lines. O'Neill told Reagan that Republican opponents were friends "after six o'clock". Reagan would sometimes call O'Neill at any time and ask if it was after six o'clock to which O'Neill would invariably respond, "Absolutely, Mr. President".{{sfn|Cannon|2001|pp=100, 102}}}} He lifted federal oil and gasoline price controls on January 28, 1981,{{sfn|Graetz|2012|p=34}} and in August, he signed the [[Economic Recovery Tax Act of 1981]]{{sfn|Pemberton|1998|p=103}} to dramatically lower federal [[income tax in the United States|income tax rates]] and require exemptions and brackets to be indexed for inflation starting in 1985.{{sfn|Steuerle|1992|p=42}} Amid growing concerns about [[National debt of the United States|the mounting federal debt]], Reagan signed the [[Tax Equity and Fiscal Responsibility Act of 1982]],{{sfn|Pemberton|1998|pp=127–128}} one of the eleven times Reagan raised taxes.{{sfn|Bartlett|2012|p=44}} The bill doubled [[Cigarette taxes in the United States|the federal cigarette tax]], rescinded a portion of the corporate tax cuts from the 1981 tax bill,{{sfn|Rossinow|2015|p=62}} and according to [[Paul Krugman]], "a third of the 1981 cut" overall.<ref>{{cite web |url=https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |url-access=subscription |title=The Great Taxer |last=Krugman |first=Paul |author-link=Paul Krugman |date=June 8, 2004 |website=[[The New York Times]] |access-date=August 30, 2011 |archive-url=https://web.archive.org/web/20221220114428/https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |archive-date=December 20, 2022}}</ref> Many of his supporters condemned the bill, but Reagan defended his preservation of cuts on individual income tax rates.{{sfn|Pemberton|1998|p=128}} By 1983, the amount of federal tax had fallen for all or most taxpayers, with taxes for higher-income people decreasing the most.{{sfn|Rossinow|2015|p=63}}

The [[Tax Reform Act of 1986]] reduced the number of tax brackets and top tax rate, and almost doubled [[personal exemption]]s.{{sfn|Pemberton|1998||p=145}}

To Reagan, [[Reagan tax cuts|the tax cuts]] would not have increased the deficit as long as there was enough economic growth and spending cuts. His policies proposed that economic growth would occur when the tax cuts spurred investments. This theoretical relationship has been illustrated by some with the controversial [[Laffer curve]].{{sfnm|1a1=Pemberton|1y=1998|1p=96|2a1=Woodard|2y=2012|2p=119}} Critics labeled this "[[trickle-down economics]]", the belief that tax policies that benefit the wealthy will spread to the poor.{{sfn|Cannon|2000|p=222}} [[Milton Friedman]] and [[Robert Mundell]] argued that these policies invigorated America's economy and contributed to the [[1990s United States boom|economic boom of the 1990s]].<ref>{{cite web |url=https://www.bloomberg.com/news/articles/2004-06-20/reagans-economic-legacy |url-access=subscription |title=Reagan's Economic Legacy |date=June 21, 2004 |website=[[Bloomberg Businessweek]] |access-date=December 30, 2022 |archive-url=https://web.archive.org/web/20120626061110/http://www.businessweek.com/magazine/content/04_25/b3888032_mz011.htm |archive-date=June 26, 2012}}</ref>

====Inflation and unemployment====
[[File:1981–1989 monthly unemployment, inflation, and interest rates.svg|thumb|upright=1.3|alt=Line charts showing Bureau of Labor Statistics and Federal Reserve Economic Data information on the monthly unemployment, inflation, and interest rates from January 1981 to January 1989|Monthly unemployment, inflation, and interest rates from January 1981 to January 1989 according to the Bureau of Labor Statistics and [[Federal Reserve Economic Data]]]]

Reagan took office in the midst of [[stagflation]].{{sfn|Li|2013|p=221}} The economy briefly experienced growth before plunging into a recession in July 1981.{{sfn|Rossinow|2015|p=90}} As Federal Reserve chairman, [[Paul Volcker]] fought inflation by pursuing [[Shock therapy (economics)|a tight money policy of high interest rates]],{{sfn|Brands|2015|p=318}} which restricted lending and investment, raised unemployment, and temporarily reduced economic growth.{{sfn|Rossinow|2015|pp=89–90}} In December 1982, the [[Bureau of Labor Statistics]] (BLS) measured the unemployment rate at 10.8 percent.{{sfn|DeGrasse|1983|p=14}} Around the same time, economic activity [[List of economic expansions in the United States|began to rise until its end in 1990]], setting the record for the (then) longest peacetime expansion.{{sfn|Sinai|1992|p=1}}{{sfn|Cannon|2000|p=235}}<ref>{{cite book |last=Collins |first=Robert |year=2002 |title=More: The Politics of Economic Growth in Postwar America |publisher=[[Oxford University Press]] |isbn=978-0195152630|page=211}}</ref> In 1983, the recession ended{{sfn|Brands|2015|p=452}} and Reagan nominated Volcker to a second term in fear of damaging confidence in the economic recovery.{{sfn|Brands|2015|p=668}}

Reagan appointed [[Alan Greenspan]] to succeed Volcker in 1987. Greenspan raised interest rates in another attempt to curb inflation, setting off the [[Black Monday (1987)|Black Monday]] stock market crash, although the markets eventually recovered.{{sfn|Brands|2015|pp=669–671}} By 1989, the BLS measured unemployment at 5.3 percent.{{sfn|Li|2013|p=219}} The inflation rate dropped from 12 percent during the 1980 election to under 5 percent in 1989. Likewise, the interest rate dropped from 15 percent to under 10 percent.{{sfn|Pemberton|1998|p=206}} Yet, not all shared equally in the economic recovery, and both [[Income inequality in the United States|economic inequality]]{{sfn|Patterson|2005|pp=166–167}} and the number of [[Homelessness in the United States|homeless individuals]] increased during the 1980s.{{sfn|Rossinow|2015|pp=144–145}} Critics have contended that a majority of the jobs created during this decade paid the minimum wage.{{sfn|Pemberton|1998|p=207}}

====Government spending====
In 1981, in an effort to keep it solvent, Reagan approved a plan for cuts to Social Security. He later backed off due to public backlash.{{sfn|Brands|2015|pp=300–303}} He then created the [[Greenspan Commission]] to keep Social Security financially secure, and in 1983 he signed amendments to raise both the program's payroll taxes and retirement age for benefits.{{sfn|Patterson|2005|pp=163–164}} He had signed the [[Omnibus Budget Reconciliation Act of 1981]] to cut funding for [[federal assistance]] such as food stamps, [[unemployment benefits]], [[subsidized housing]] and the [[Aid to Families with Dependent Children]],{{sfn|Pemberton|1998|p=141}} and would discontinue the [[Comprehensive Employment and Training Act]].{{sfn|Patterson|2005|p=157}} On the other side, defense spending doubled between 1981 and 1985.<ref name="Bowman 2004">{{cite web |url=https://www.baltimoresun.com/news/bal-te.pentagon08jun08-story.html |title=Reagan guided huge buildup in arms race |last=Bowman |first=Tom |date=June 8, 2004 |website=[[The Baltimore Sun]] |access-date=January 1, 2023 |archive-url=https://web.archive.org/web/20230101051322/https://www.baltimoresun.com/news/bal-te.pentagon08jun08-story.html |archive-date=January 1, 2023}}</ref> During Reagan's presidency, [[Project Socrates]] operated within the [[Defense Intelligence Agency]] to discover why the United States was unable to maintain its economic competitiveness. According to program director Michael Sekora, their findings helped the country surpass the Soviets in terms of missile defense technology.<ref>{{cite web |url=https://www.cnbc.com/2017/06/30/trump-wrong-china-tech-former-reagan-star-wars-beat-soviets.html |title=Trump taking wrong approach to China, says Reagan official who helped 'Star Wars' beat the Soviets |last=Shinal |first=John |date=July 1, 2017 |publisher=[[CNBC]] |access-date=January 17, 2023 |archive-url=https://web.archive.org/web/20230117212646/https://www.cnbc.com/2017/06/30/trump-wrong-china-tech-former-reagan-star-wars-beat-soviets.html |archive-date=January 17, 2023}}</ref>{{sfn|Fialka|1999|p=8}}

====Deregulation====
Reagan sought to loosen federal regulation of economic activities, and he appointed key officials who shared this agenda. [[William Leuchtenburg]] writes that by 1986, the Reagan administration eliminated almost half of the federal regulations that had existed in 1981.{{sfn|Leuchtenburg|2015|pp=602–604}} The 1982 [[Garn–St. Germain Depository Institutions Act]] deregulated [[savings and loan association]]s by letting them make a variety of loans and investments outside of real estate.{{sfn|Pemberton|1998|p=130}} After the bill's passage, savings and loans associations engaged in riskier activities, and the leaders of some institutions embezzled funds. The administration's inattentiveness toward the industry contributed to the [[savings and loan crisis]] and costly bailouts.{{sfn|Patterson|2005|p=175}}

====Deficits====
The deficits were exacerbated by the early 1980s recession, which cut into federal revenue.{{sfn|Leuchtenburg|2015|pp=605–606}} The national debt tripled between the fiscal years of 1980 and 1989, and the national debt as a percentage of the gross domestic product rose from 33 percent in 1981 to 53 percent by 1989. During his time in office, Reagan never fulfilled his 1980 campaign promise of submitting a [[balanced budget]]. The United States borrowed heavily to cover newly spawned federal budget deficits.{{sfnm|1a1=Patterson|1y=2005|1pp=158–159|2a1=Woodard|2y=2012|2p=132}} Reagan described the tripled debt the "greatest disappointment of his presidency".{{sfn|Cannon|2001|p=128}} [[Jeffrey Frankel]] opined that the deficits were a major reason why Reagan's successor, Bush, reneged on [[Read my lips: no new taxes|his campaign promise]] by raising taxes through the [[Budget Enforcement Act of 1990]].<ref>{{cite web |url=https://www.theguardian.com/business/2018/dec/11/george-hw-bush-donald-trump-budget-deficit-taxes |title=George HW Bush was fiscally responsible – unlike Donald Trump |last=Frankel |first=Jeffrey |author-link=Jeffrey Frankel |date=December 11, 2018 |website=[[The Guardian]] |access-date=December 31, 2022 |archive-url=https://web.archive.org/web/20221231035650/https://www.theguardian.com/business/2018/dec/11/george-hw-bush-donald-trump-budget-deficit-taxes |archive-date=December 31, 2022}}</ref>