Economic crisis, President Ronald Reagan, United States of America
The worst economic crisis that happened in the world history occurred between the late 1970s spreading over the years to early 1980s. The USA was one of the world economies that were greatly hit by the economic downturn. The debts escalated and savings went down in the American economy leading to problems in the loans that have been advanced. The period was characterized by introduction of various policies that tried to correct the economic problem in the world (Friedman, 2011). This paper investigates the period when President Ronald Reagan made efforts to restore the American economy and also the global economy. Reaganomics is an overview of the economic aspects during the era of President Reagan and the implications it had on that time and the present.
The economy of the United States of America worsened during the period between 1981 and 1982 when Ronald Eagan was the president. During this time, the Americans were hit by a serious depression in the reserves set for the federal operations. The policy laid down on the monetary control was fragile and did not function to reduce the usual tendency of inflation of the money.
[...] The Reagan's government was determined to cut on the domestic expenditure in social programs and decreased the capital allocation to the defense, which had been getting high allocation during the period of world security hostilities (Bernanke, 2013). The economic status in the United States of America was deteriorating with the government's application of tax cuts and expenditure control. The depression that became worse in 1980s was triggered by the revolution in Iran that caused a hike in the prices of the crude oil. The inflation spread to the whole world because the period was characterized by industrial revolution. [...]
[...] The Federal Reserve and the financial crisis. Efenhoff, K. G. (2009). The financial crisis and the European Union. New York: Nova Science Publishers. Friedman, J. (2011). What caused the financial crisis. Philadelphia: University of Pennsylvania Press. [...]
[...] Many of the strategies in economic policy and decision making that he achieved, especially in free market economy are among the major ideologies that the republicans advocate (Bernanke, 2013). A key governance strategy of republicans is having a small government and creating a large private sector, for an efficient market economy. Reagan leaves a legacy of shrewd and visionary leader. Reagan's policies were able to drive the American economy for a decade. It is important to note the essence of determination and political will in effective leadership, just like Reagan. [...]
[...] The value of the inadequate resource therefore had to rise ultimately. The fourth program towards reconstruction of the American economy included deregulating prices in the economy. This framework created a free environment for the market economy to function with less controls by cartels and in high-income monopolists in the economy. Reduction of the oil prices by almost fifty percent was the most impressive achievement of President Reagan's economic plan. The ailing consumer population got a reprieve of approximately one hundred billion shillings that were swept by the inflated prices. [...]
[...] The cost cut was even larger after 1982 when a reduction of up to sixteen percent was achieved. The department of defense was the main target for the deflation of public budget and that was the reason Reagan did not advocate for any use of weapons during the cold war. It is notable that the plan led to a tactical slashing down of the domestic public expenditure even with better compensations for the military. The facts and figures for the deflation of the government spending was estimated to have reached a decline of twenty-one percent from twenty-three percent of the entire gross domestic production. [...]
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