How Successful Was Reaganomics in the Years 1981-89?

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How successful was Reaganomics in the years 1981 – 89? Reaganomics was Reagan’s economic philosophy, which emphasised low taxes and deregulation, which it was thought would stimulate the economy. He aimed to revive the economy by decreasing taxes, which would encourage people to work harder and buy more. He also aimed to reduce the size and role of the government, cutting public spending and minimising welfare state arrangements where possible. He also wanted to deregulate state and federal government requirements and liberate business and allow capitalism to flourish making people more prosperous and enabling them to pay more taxes, decreasing federal deficit. He also wanted to strengthen the nation’s defences. It can be argues that reaganomics was not successful in the years 1981 – 89 but it depends on who you ask, the democrats would say it didn’t work where republicans would say it did work. After the Great Depression the consensus was that the government’s main target should be to maintain a low level of unemployment. But the reaganites said that the low unemployment obsession had pushed up public expenditure and led to budget deficits and stagflation and they believed in supply side economics which emphasised growth. Even Reagan’s budget director, David Stockman, in 1981 admitted that the administration’s plan did not add up and would probably increase the federal deficit. Reagan appeared regularly on TV to promote his economic policy and this helped account for his success. Many Americans did not like his policies but like him and his role in the successful passage of the budget clearly hinged squarely upon his ‘great communicator’ talents. This shows that his policies did not get off to a good start as his budget director and the public did not like his policies. In the first two years of Reagan’s reign the economy still remained rather worrying as

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