what is voodoo economics 
voodoo economics is a derogatory phrase first used during the 1980 presidential primaries by george h w bush then a candidate to describe his opponent ronald reagan s proposals to reinvigorate the u s economy reagan won that election and his economic policies came to be known as reaganomics reaganomics was a policy that combined steep tax cuts the deregulation of domestic markets lower government spending and a tightening of the money supply understanding voodoo economicsronald reagan a republican was elected the 40th u s president after a prolonged period of economic stagflation that began under republican president gerald ford in 1976 and continued into the term of president jimmy carter a democrat whose single term ended with his defeat by reagan in the 1980 election reagan s vice president was george h w bush president reagan was a proponent of supply side economics which favors reducing income and capital gains tax rates in order to encourage economic growth he believed that the savings generated by companies from corporate tax cuts would trickle down that is the savings would be invested in ways that benefited smaller businesses spurred innovation created new jobs and eventually benefited the population as a whole he also asserted that the newly invigorated companies would eventually pay more taxes anyway boosting the government s coffers as a healthier economy encouraged them to increase production in 1980 bush sr famously described these economic policies as voodoo economics arguing that supply side reforms would not be enough to rejuvenate the economy and would greatly increase the national debt bush sr changed his stance after being elected vice president first denying that he called reagan s policy proposal voodoo economics and then claiming that he was kidding when footage was dug up showing him using the phrase nevertheless the phrase caught on with reagan s critics 1criticism of voodoo economicsbush sr was criticized for characterizing the policies of his then rival as voodoo economics his comments were viewed as a spiteful attempt to discredit reagan while running against him in the republican primary a core belief of supply side economics is that motivating the rich invigorates spending and increases confidence and job security among the working population in the drooping economy of the late 1970s it was argued that these forces would bring the economy out of the stagflation it had been mired in since 1973 furthermore it was believed less government spending and reduced oversight would give the financial industry in particular a much needed boost those expectations did not all take shape exactly as planned during president reagan s two terms in office unemployment fell considerably disposable income rose and inflation was brought under control however the expectation that decreased taxes on the wealthy and businesses would result in increased spending on goods services and salaries failed to materialize moreover president reagan s relaxed regulation contributed to the savings and loan crisis by the early 1990s the u s economy had fallen back into recession president reagan s policies contributed to a near doubling of the national debt in part due to his commitment to cut taxes while increasing military spending voodoo economics has become a popular phrase used to dismiss any ambitious economic pledges made by a politician special considerationsafter two terms as vice president george h w bush was elected president in 1989 and served for a single term as president bush prioritized broader fiscal responsibility over tax cuts in 1990 he even agreed to a tax increase reneging on a promise made just two years earlier that embarrassing u turn saw him face criticism from his own party he went on to lose the 1992 presidential election to a democrat bill clinton 