and Study Guide Lesson 2 The Reagan Years ESSENTIAL QUESTION How do you think the resurgence of conservative ideas has changed society? Reading HELPDESK Content Vocabulary supply-side economics economic theory that lower taxes will boost the economy as businesses and individuals invest their money, thereby creating prosperity and economic growth that will offset the tax cuts deficit the amount by which expenses exceed income mutual assured destruction the strategy assuming that, as long as two countries can destroy each other with nuclear weapons, they will be afraid to use them Academic Vocabulary confirmation the formal approval of an executive act by a legislature visible what can be seen
TAKING NOTES: Organizing ACTIVITY As you read about the resurgence of conservatism, complete the graphic organizer below by filling in the major points of the supply-side theory _ of economics. IT MATTERS BECAUSE In 1981 Ronald Reagan became president. He cut taxes. He removed regulations from several industries. He chose conservative judges for the Supreme Court. In addition, he began spending to build a larger military that greatly increased government spending. He also sent aid to groups fighting communism. The Road to the White House GUIDING QUESTION How did Reagan s early personal experiences influence his political beliefs? At age 15, Ronald Reagan worked as a lifeguard on the Rock River in Illinois. Reagan later wrote that being a lifeguard taught him that people feel insulted when they need to be saved. Reagan believed in self-reliance and independence. His belief that people do not want to be saved guided his actions as president. Becoming a Conservative Reagan s adult experiences also moved him toward conservative views. He graduated from Eureka College in 1932. Then, he worked as a radio broadcaster. Reagan became a Hollywood actor in the late 1930s. In 1947 he became the president of the Screen Actors Guild (SAG), the actors union. While he was president of SAG, he testified about communism before the House Un-American Activities Committee. Reagan had been a liberal Democrat. However, dealing with Communists in the union led him to have more conservative Republican views.
In the 1950s, Reagan was on a television show. He traveled around the country to promote the program. Reagan met many people during his travels. He said that many of these people complained about big government. Reagan ran for governor of California in 1966. He was a strong and respected conservative by then. Reagan won the election. In 1970 he was reelected. Ten years later, he won the Republican nomination for president. The Election of 1980 Reagan promised to lower taxes and spend more on the military. Americans liked his plans. Conservatives supported him because he wanted to add an amendment to the constitution to make abortion illegal. Reagan won the election easily. For the first time since 1954, Republicans also won the majority in the Senate. PROGRESS CHECK Assessing How did Reagan's travels around the country affect his political beliefs? Domestic Policies GUIDING QUESTION If you were president, how would you fight stagflation? Ronald Reagan believed that the key to improving the economy and overcoming problems in society was to get Americans to believe in themselves again. He said that government was actually the cause of many problems, not the solution. Reaganomics First, Reagan worked to solve the problem of stagflation. Stagflation is a time of high inflation and high unemployment. Conservative economists had different ideas for fixing the economy. One group supported raising interest rates. They said this would fight inflation. The other group supported supply-side economics. They believed that high taxes took too much money away from investors. They believed tax cuts could provide extra money to help businesses grow. Growing businesses would in turn create new jobs. The result would be a larger supply of things for consumers to buy. In addition, people would have more money to spend because of the tax cuts. Reagan used supply-side economics. He told the Federal Reserve to keep interest rates high. He asked Congress to pass a huge 25 percent tax cut. Critics called his policy Reaganomics or trickle-down economics. They believed Reagan s policy would help corporations and wealthy Americans. But they argued that little wealth would trickle down to middle-class or poor Americans. Cutting Programs Lower taxes increased the budget deficit the amount by which spending exceeds income. Reagan tried to keep the deficit under control. _ He proposed cutting spending for social programs including food stamps, school lunches, Medicare payments, unemployment payments, and student loans. Congress fought against these cuts at first but finally passed most of them. The fight convinced Reagan that Congress would never cut spending enough to balance
the budget. He decided that cutting taxes and building up the military were more important than balancing the budget. Deregulation Reagan believed that excessive government regulation was another cause of the economy s problems. His first act as president was to end price controls on oil and gasoline. Deregulation of television broadcasting, banking, and automotive industries soon followed. Oil drilling, mining, and logging on public land increased. In addition, the EPA loosened regulations on pollution-control equipment. It also reduced safety checks on chemicals and pesticides. Environmentalists did not like these changes. Reagan Wins Reelection By 1984 the nation had begun the biggest economic expansion in its history. Incomes rose. Unemployment fell. The recovery made Reagan very popular. He won the 1984 presidential election in a landslide. Reagan defeated Democrats Walter Mondale and Representative Geraldine Ferraro. Ferraro was the first woman nominated by a major party to run for vice president. Shifting the Judicial Balance Reagan wanted a Supreme Court that had a constructionist viewpoint. This meant that he did not want Supreme Court judges to interpret the Constitution. Instead, he wanted them to follow the Constitution s original intent. He changed the Supreme Court by nominating conservative judges. First, he nominated moderate conservative Sandra Day O Connor. She became the first female Supreme Court justice in 1981. In 1986 Chief Justice Warren Burger retired. Reagan chose conservative justice William Rehnquist to take Burger s place as chief justice. Reagan picked conservative judge Antonin Scalia to fill Rehnquist s associate seat on the court. In 1987 Reagan nominated conservative Robert Bork to replace another justice. However, the Senate denied Bork s confirmation. Reagan nominated moderate Anthony Kennedy as a new associate justice instead. PROGRESS CHECK Expressing What factors led to the reelection of President Reagan? Reagan Oversees a Military Buildup GUIDING QUESTION Why did Reagan build up the military? Reagan also started a new foreign policy. His policy rejected both containment and détente from earlier administrations. He called the Soviet Union an evil empire. In his view, the United States should try to defeat evil, not try to contain or negotiate with it. Peace Through Strength Reagan believed that the only option in dealing with the Soviet Union was peace through strength. He used this phrase during his campaign. Reagan launched a $1.5 trillion military buildup, the largest military buildup during peacetime in U.S. history. The buildup would bankrupt and destroy the Soviet Union if it tried to keep up. The
United States also tried to stop nations from supporting terrorism. For example, Libya backed a terrorist bombing in Berlin in 1986. U.S. forces responded by launching an air attack on Libya on April 14, 1986. Reagan s military buildup created new jobs in defense industries. Supply-side economists had predicted that the country could balance the budget. They said that cuts in government programs and the effects of lower taxes would provide the money needed to balance out the extra spending. Although more money did come in from taxes, Reagan could not make big cuts in popular programs. The annual budget deficit went from $80 billion to more than $200 billion. The Reagan Doctrine Reagan believed that the United States should support guerrilla groups who were fighting to overthrow Communist and pro-soviet governments. This policy, or doctrine, became known as the Reagan Doctrine. Aid to Afghan Rebels One highly visible example of the Reagan Doctrine in action took place in Afghanistan. In 1979 Soviet troops had invaded Afghanistan. Reagan sent $570 million in secret military aid to Afghan guerrillas who were fighting the Soviets. The Soviets were soon trapped in a situation that was like the U.S. experience in Vietnam. The war strained the Soviet economy. Its troops suffered many deaths and injuries. In 1988 the Soviets decided to withdraw from Afghanistan. Nicaragua and Grenada Reagan was also concerned about Soviet influence in Nicaragua. Rebels called Sandinistas had overthrown a pro-american dictator in Nicaragua in 1979. The Sandinistas set up a socialist government and accepted Cuban and Soviet aid. Reagan officials responded by secretly sending weapons to an anti-sandinista guerrilla group called the contras. Congress learned about this policy and banned any more aid to the contras. In Grenada, extreme Marxists overthrew the government in 1983. Reagan sent in troops that quickly defeated the socialists and set up a new anti-communist government. The Iran-Contra Scandal Although Congress had banned U.S. aid to the contras, some people in Reagan s administration continued to support the Nicaraguan rebels. These same officials also secretly sold weapons to Iran. Iran, considered an enemy of the United States, supported terrorism. Reagan s administration sold the weapons in exchange for the release of American hostages in the Middle East and sent the money from the weapons sales to the contras. These activities were illegal. News of these secret, illegal activities broke in November 1986 when the story made the news. Congress investigated. Marine colonel Oliver North, senior National Security Council members, and CIA officials admitted to Congress that they had covered up their actions. President Reagan had approved the sale of weapons to Iran. However, the congressional investigation determined that Reagan did not directly know about money sent to the contras. Arms Control As part of the military buildup, Reagan decided to place missiles in Western Europe to counter Soviet missiles. People all over the world protested. Reagan offered to cancel the new U.S. missiles. He said he would not place the U.S. missiles if the Soviets took their missiles out of Eastern Europe. Reagan also proposed Strategic Arms Reduction Talks (START) to cut the number of missiles on both sides in half. The Soviets refused.
The Roman Resurgence Civilization of Conservatism, 1980-1992 Star Wars Reagan believed the United States needed to have missiles ready in Europe. However, he disagreed with the military strategy known as nuclear deterrence. Nuclear deterrence was also called mutual assured destruction. This strategy assumed that as long as the Soviet Union and the United States could destroy each other with nuclear weapons, they would both be afraid to use them. However, Reagan knew that if deterrence didn t work and a nuclear war really did begin, there would be no way to defend the United States. In March 1983, he proposed the Strategic Defense Initiative (SDI), also called Star Wars, to develop weapons to intercept incoming missiles. A New Soviet Leader In 1985 Mikhail Gorbachev became the leader of the Soviet Union. He agreed to begin arms-control talks again. Gorbachev believed that the Soviet Union could not afford another arms race with the United States. Reagan and Gorbachev had a series of meetings. The first meeting ended without an agreement. Gorbachev had promised to cut back nuclear forces if Reagan gave up SDI, but Reagan refused. Reagan then challenged Gorbachev to make economic and political changes. The Berlin Wall was a symbol of the division in Europe. Reagan challenged Gorbachev to tear it down. Relations Improve In December 1987, the two leaders signed the Intermediate Range Nuclear Forces (INF) Treaty. INF was the first treaty to call for the destruction of nuclear weapons. As soon as Gorbachev had an arms control deal in place, he was able to enact economic and political reforms. These reforms eventually led to the failure of communism in Eastern Europe and the breakup of the Soviet Union. As Ronald Reagan s second term came to an end, the U.S. economy was doing very well, the military was strong, and relations with the Soviet Union were improving quickly. PROGRESS CHECK Explaining Why did President Reagan not favor a policy of détente?