1. Reagan’s Domestic Policy

2. Key Terms Reaganomics Fiscal Conservatism The “New Right” Neoconservatives

3. I. Reagan’s Revolution Fiscal Conservatism 1. (http://www.allwords.com/word-fiscal+conservative.html) One who favors a balanced budget, prefering spending cuts or tax increases to borrowing.http://www.allwords.com/word-fiscal+conservative.html Reduce the size of the Govn’t Slash Taxes “Government is not the solution… Government is the problem”

4. Reagan’s Revolution Cont. Wanted a change from using tax money for federal “benefits” Tax cuts of $35 Million Supported by the “new right” 1. Consisted of groups like the Catholic group “The Moral Majority” 2. Focused on cultural concerns Neoconservatives arose from the ideals of Reagan 1. Free-market capitalism 2. Questioned welfare programs 3. Harsh on Soviets

5. II. Budget “Gut the budget” Got the left to agree to his tax cuts 25% of cuts across the board August 1981, Congress approved a huge tax reform bill 1. Lowered individual taxes 2. Almost eliminated federal estate taxes 3. Tax free savings plan for investors

6. III. PATCO Professional Air Traffic Controllers Organization They went on strike, threatened to completely shut down air travel Reagan deemed it an illegal strike and fired all of them This left jobs to managers, some controllers not affiliated with the strike, and mostly untrained new employees

7. PATCO cont. Critics expected accidents, but when none happened Reagan was seen as a strong leader This was a victory for Reagan but a great loss for unions 1. Businesses were less afraid and did not give into demands as easily, one of the things that hurt the economy in the 1970’s

8. IV. Supply-Side Economics “Reaganomics” Believed that control over the budget would promote growth. 1. Stimulate the economy 2. Good for business Economy went into a depression 1. Unemployment 11% (1982) 2. Businesses shut down 3. Banks failed

9. Supply-Side cont. Only turned good results in 1983 Caused larger gaps in the incomes of citizens Value of the dollar increased at this time as well.

10. V. Social Legacy He appointed almost half of the federal judges Put 3 judges in the supreme court Used this in his fight against affirmative action and abortion