1. Chapter 25 Section 2 Conservative Policies Under Reagan and Bush

2. Reaganomics 1.Budget Cuts- cuts in government spending on social programs Slashed by 10% welfare, food stamps, school lunches, Medicaid 2.Tax Cuts- Supply-side economics theory that if people paid fewer taxes, they would save more money in banks, banks would make more loans to businesses increasing productivity “Trickle-Down Theory” 3.Increased Defense Spending Military spending doubles Strategic Defense Initiative

3. Recession and Recovery July 1981 to November 1982- worst recession since 1930’s 1983 economy begins to recover Tax cuts Interest rates decline Inflation drops Stock market rises However, national debt doubles !!! Federal government is spending more than taking in

4. Deregulating the Economy Cutting back of federal regulation of industry 1.Remove price controls on oil 2.Eliminated safety inspections for nursing homes 3.Deregulated airline industry 4.Deregulated savings and loan industries Led to increased competition and resulted in lower prices

5. Continuing Deregulation Budget cut for the EPA Public land sold to private developers In favor of expanded drilling for oil, timber cutting Eased restrictions on coal mining

6. Reagan’s Supporters Business people- in favor of deregulation Southerners- limits on federal power Westerners- resented federal control on mining and grazing Reagan Democrats – thought Democratic party had gone too far left

7. 1984 Election Democratic Party’s Nomination – Walter Mondale and Geraldine Ferraro

8. 1988 Election Republican nominee – Vice President George Bush “read my lips, no new taxes”read my lips, no new taxes” Democratic nominee- Michael Dukakis, governor of Massachusetts Attack on Dukakis as soft on crime, unpatriotic, too liberalsoft on crime