The 1980s Chapter 25

Ronald Reagan: The Great Communicator Former Actor. Charming and cheerful. Superb analyst of the public mood. Space Shuttle Challenger Accident. (1986) “The Teflon President” Public affection for him as a person.

Reagan and the Economy Economy changes role of government “Government is the problem” Market should control economy, not the government (deregulation of business) Supply-side economics Tax cuts will actually raise government revenues that would help reduce the budget deficit because wealth will be increased. The wealthy would engage in productive investment. “trickle down”

Reagan and the Economy Economic Recovery Act (1981) Cut personal income taxes by 25% Lowed max from 70% to 50% Reagan tax cuts, however, were accompanied by massive increases in defense spending. The combination of massive defense spending and substantial tax cuts left the federal government with massive deficits. The United States, a creditor nation since WWI, had by 1986 become the world’s largest debtor.

The End of the Cold War détente – In the 1970s, Nixon, Ford, and Carter had all followed a policy of détente (an easing of tensions) in an effort to end the rivalry between the Soviets and the Americans. Ever since the Cuban missile crisis in 1962, the Soviets had steadily expanded their nuclear arsenal. Reagan Peace through Strength The heart of the Reagan revolution was a sharp rise in military spending. Defense spending jumped about 50%.

The Defense Buildup Massive buildup of nuclear and conventional weapons to close the gap between Soviet and American military forces. He also pushed the strategic defense initiative (SDI) A space based anti-missile defense shield. “Star Wars” Forced the Soviets to launch an expensive research and development program of their own to keep pace.

Cold War Rhetoric He combined the increases in spending with strong rhetoric such as calling the Soviet Union an evil empire and demanding that the Berlin Wall come down. “Evil Empire” By his second term, it was clear that the faltering Soviet economy would not be able to match the spending of the United States. Mikhail Gorbachev’s election in 1985 brought a Soviet leader who wanted to bring domestic reform within the Soviet Union and improve relations with the U.S.

Reagan and Gorbachev Geneva Summit (1985) INF Treaty (1987) Reagan and Gorbachev met and signed several cultural and scientific agreements and promised arms limitation talks. INF Treaty (1987) A treaty to eliminate intermediate-range nuclear forces. First step toward the eventual end of the arms race.

U.S. in the 1980s Sandra Day O’Connor - first woman justice of the Supreme Court. (1981) AIDS (Acquired Immune Deficiency Syndrome) Gay men and intravenous drug users were especially at risk. No prospect of cure. “Yuppies” (Young, upwardly mobile professionals) caught up in the race for materialism. “Black Monday” (October 1987) Stock market plummeted 22.6 percent 1929 – 12.8 percent

Standing Tall in a Chaotic World Terrorism in the Middle East Beirut, Lebanon French, Italian, and U.S. sent in as “peacekeepers” U.S. troops pull out in 1984. Iran-Iraq war had erupted in 1980 U.S. funneled aid to Iraq. Mounting Frustrations in Central America Grenada invasion (1983) The small Caribbean island had signed military agreements with Communist-bloc countries. 1,900 paratroopers and marines deposed leftist government and evacuated American students. Growing Drug Trade (Cocaine)

The Iran-Contra Affair Scandal surfaced in his second administration (1986) The Reagan administration had secretly and against the expressed orders of Congress sold weapons to Iran in an attempt to free U.S. hostages held in Lebanon by terrorists. They then used money from the sale of these weapons to buy weapons for the Contra rebels in Nicaragua who were freedom fighters fighting against communism. Marine Lieutenant-Colonel Oliver North had been running secret operations from the basement of the White House.

George H.W. Bush Despite the scandal, Reagan’s popularity remained high because of the improvement in Soviet-American relations and his V.P. George Bush won the 1988 election largely because of his connection to Reagan.

Reagan Baggage Savings and Loan Scandals Had been set up by Reagan to help people buy homes. By 1989 hundreds of S&L’s had failed. Bush tried to close or sell ailing S&L’s and bail out the depositors. National Debt $2.6 trillion by 1988. “a horrendous fiscal mess” 1990 - Bush approves a combination of tax hikes and spending cuts to reduce deficit despite “Read my lips, no new taxes” campaign pledge

Bush’s Domestic Agenda Bush had difficulty defining and asserting his own political identity on domestic issues. “vision thing” Americans with Disabilities Act (1990)

Bush and Gorbachev Bush was in many ways the perfect foreign policy president. He sought to move “Beyond the Cold War.” Bush was pragmatic and was an expert at personal diplomacy. Bush would guide the end of the Cold War so that it ended peacefully. Gorbachev’s foreign policy sought rapprochement and trade with the West, to relieve the Soviet economy of burdensome military costs.

Revolutions of 1989 Soviet troops left Afghanistan in 1989. Gorbachev repudiated the “Brezhnev Doctrine” Communist party rule ended in Poland, Hungary, Czechoslovakia, Bulgaria, and Romania. Fall of the Berlin Wall (November 9, 1989) Reunification of Germany (October 3, 1990) Germany in NATO Warsaw Pact dissolved

An End to the Cold War Coup attempt against Gorbachev (August 1991) Bush and Boris Yeltsin put public pressure on the coup leaders. Gorbachev released. The Communist party apparatus was dismantled. Soviet Union Collapses December 25, 1991, Gorbachev resigns and announces the end of the Soviet Union. A new Commonwealth of Independent States made up of 12 autonomous republics.

Significant Events  1979 Moral majority established  1980 Reagan defeats Carter  1981 Reagan breaks air traffic controllers’ strike  1982 Attack on U.S. marine barracks in Lebanon  1983 Reagan proposes SDI  1986 Iran-Contra scandal breaks  1988 Bush elected president  1989 Berlin Wall taken down  1990 Iraq invades Kuwait  1991 Operation Desert Storm launched  1992 Clinton defeats Perot and Bush  1993 NAFTA trade agreement approved