33.2- Conservative Policies Under Reagan and Bush Lesson Objective: To Understand the programs and policies of Presidents Ronald Reagan and George Bush Essential Question: How did Conservative philosophy change government policies and priorities?

Key Terms Reaganomics Supply-side economics Trickle-Down Economics Strategic Defense Initiative Trade imbalance Sandra Day O’Conner William Rehnquist Geraldine Ferraro

Reaganomics Define: Cut government spending- $40 Billion – Mostly in domestic programs Cuts made in programs that benefited smaller interest groups while leaving larger entitlement groups alone Tax Cuts – Reduced taxes to increase private investment – This would increase the nations supply of goods & services – Supply-side economics Define: Became known as Trickle-Down Economics- Why?

Military Spending Doubled Defense Budget B-1 Bombers Strategic Defense Initiative – Would shoot down enemy missiles launched at the US – Nicknamed Star Wars National Debt Rose from $900 Billion in 1980 to $4 Trillion in 1992 Interest payments made up 21% of Federal expenditures – Reduced money for investment in infrastructure and technology among others Trade Imbalance Define US dollars were going to other countries However US companies had to improve their products to compete with foreign competition To address deficit and debt Reagan raised taxes in areas other than income (payroll, etc..). Also implemented more simplified tax code eliminating lots of loopholes and breaks

SDI

PolicyWhy was it done? What three major policy shifts made up Reaganomics?

An Improving Economy Inflation dropped 10% by 1988 Recession in 1982 Economic growth in 1983 driven by consumer spending and investment – GDP increased 10% – Increased consumer confidence But… – Tax revenues were not as high as expected had to borrow money- ran high deficits Stock Market Crash in 1987 – Market quickly recovered

Deregulating the Economy One of Reagan’s goals was to reduce the scope of the federal government-mainly by reducing regulations on business – What would be positive effects? Negative ones? – Increased competition and resulted in lower prices for the consumer – Sometimes regulation completely stopped- or just transferred the responsibility to local and state governments Without regulation the Savings and Loan industry collapsed and billions of dollars were lost Seriously reduced funding to the EPA and allowed businesses to operate with significantly less oversight

Pros and Cons of deregulating the economy ProsCons

Judicial Appointments During the 1960s and 1970s what major cases did the Supreme Court Rule on? Were the judges conservative or Liberal? – Reagan (and Bush) were able to appoint numerous judges to the Supreme Court and other federal courts - 50% by end of their terms Made Supreme court much more conservative: Sandra Day O’Connor Antonin Scalia Anthony Kennedy William Rehnquist- Chief Justice Clarence Thomas Made much more conservative rulings on a variety of issues

Sandra Day O’Connor

William Rehnquist

Antonin Scalia

Clarence Thomas

Anthony Kennedy

Elections of 1984 and 1988 Reagan Coalition – Business people – Southerners – Westerners – Reagan Democrats Why? Reagan and Bush defeat Mondale (Carter’s VP) and his Vice presidential candidate Geraldine Ferraro. – Reagan wins every state but Minnesota and DC Bush runs against MA Governor Dukakis – “read my lips: no new taxes” – Wins 53% of vote and 426 electoral votes

Geraldine Ferraro

Michael Dukakis

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Quiz Reagan’s economic policy was called what? 2.What was the nickname for the strategic defense initiative? 3.Who was the first woman appointed to the Supreme court? 4.Who did Reagan appoint Chief Justice of the supreme court? 5.___________ was the first woman to appear on a major party presidential ticket?