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Ronald Reagan Economic Policies

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RONALD REAGAN ECONOMIC POLICIES
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Ronald Reagan Economic Policies

Reaganomics was the popular term that was used to describe Ronald Reagan’s economic policies, which advocated for a decreased social spending, widespread tax cuts, increased military spending, and deregulation of the domestic markets. This paper aims at analyzing the economic policy of President Reagan’s administration. Generally, Reagan pledged to advance, or return, to a free market and that involved getting the government off the citizens’ backs. Specifically, he was in favor for a massive deduction in government spending, a balanced budget by the year 1984, and a more drastic cut in taxation. His main concern was the reduction of income tax, and ensuring a come back to the gold standards, when money supply was done by the markets and not the government.

Besides calling for free markets domestically, Reagan asserted deep commitment to liberty of international trade. However, when the president’s advisors went to office with the idea of cutting both taxes and spending, they found out that the first objective was easier to achieve than the second because of politics of the day. Cutting tax was popular and they did come down substantially. The top marginal rate reduced to 28 per cent from 70 per cent (Magazzino, 2010). Many loop holes were eliminated and the tax base broadened. However, cutting the spending was unpopular and the democratic congress restrained as a result of the cuts proposed by the president.

One of the most influential parties in the implementation of Reaganomics is Volcker. His efforts ensured monetary restraint quite early in the president’s administration. He was one of the economic advisors of the president. He served as the chairman of Federal Reserve and played a big role in ending the high

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