Title: The 1980s American Economy
Headings: The 1980s American Economy
The 1980s American Economy
Supply-Side Economics and a Growing Budget Deficit
Impact of the 1970s
Reagan's Economic Policy
The Size of the Government
Growing Federal Deficit
Federal Reserve
Source

Content: Proponents argue that supply-side economics results in more savings, investment, production, and, ultimately, greater economic growth. Reagan’s tax cuts mainly benefited the wealthy, but through a chain-reaction, they also helped lower-income earners as higher levels of investment eventually led to new job openings and higher wages. The Size of the Government
Cutting taxes was only one part of Reagan’s national agenda of slashing government spending. Reagan believed the federal government had become too large and interfering. During his presidency, he cut social programs and worked to reduce or eliminate government regulations that affected the consumer, workplace, and environment. But he did spend on the military. In the wake of the disastrous Vietnam War, Reagan successfully pushed for big budget increases for defense spending by arguing that the U.S. had neglected its military. Growing Federal Deficit
In the end, the reduction in taxes combined with increased military spending outweighed the spending reductions on domestic social programs. This resulted in a federal budget deficit that went well beyond the deficit levels of the early 1980s. From $74 billion in 1980, the federal budget deficit ballooned to $221 billion in 1986.