and contributed to the economic boom of the 1990s. As for the 1982 tax increase, many of his supporters condemned the bill, but Reagan defended his preservation of cuts on individual income tax rates. According to Paul Krugman, "Over all, the 1982 tax increase undid about a third of the 1981 cut; as a share of GDP, the increase was substantially larger than Mr. Clinton's 1993 tax increase." Inflation and unemployment Reagan took office in the midst of stagflation. The economy briefly experienced growth before plunging into a recession in July 1981. His approval ratings also began to drop significantly throughout the rest of the year and 1982. Federal Reserve chairman Paul Volcker fought inflation by pursuing a tight money policy of high interest rates, which restricted lending and investment, raised unemployment, and temporarily reduced economic growth. In December 1982, the Bureau of Labor Statistics (BLS) measured the unemployment rate at 10.8 percent. Around the same time, economic activity began to rise until its end in 1990, setting the record for the longest peacetime expansion. In 1983, the recession ended and Reagan nominated Volcker to a second term in fear of damaging confidence in the economic recovery. Furthermore, Reagan's approval ratings recovered and remained relatively high for the next four years. Reagan appointed Alan Greenspan to succeed Volcker in 1987. Greenspan raised interest rates in another attempt to curb inflation, setting off the Black Monday although the markets eventually recovered. By 1989, the BLS measured the unemployment rate at 5.3 percent. 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. Yet, not all shared equally in the economic recovery, and both economic inequality and the number of homeless individuals increased during the 1980s. Critics have contended that a majority of the jobs created during this decade paid the minimum wage. Government spending In 1981, in a effort to keep it solvent, Reagan approved a plan for cuts to Social Security. He later backed off of these plans due to public backlash. 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. He had signed the Omnibus Budget Reconciliation Act of 1981 to cut funding for federal assistance such as food