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Reagan Deficit

In: Business and Management

Submitted By extrarice
Words 2102
Pages 9
Introduction
In 1980s, the US government faced difficult economic issues. It was also during this time that President Ronald Reagan was tested. In his campaign against Jimmy Carter, he promised America that the government will implement strategies that will support the people. This earned him a landslide victory over Jimmy Carter. From stagflation to recession, the whole country had the worst economic period trailing the Great Depression. On his first term, President Reagan’s main objective was to address different economic problems through tax cut, decreased nondefense spending, increased defense spending and balanced budget. His policies brought success in stimulating the economy. He was able to improve the lives of the people and certain concerns during those times such as recession, unemployment and inflation.
In 1985, while efforts have been made by President Reagan to uplift the economy, the US government was still beset by unbalanced budget due to deficits. Thus in his second term, he focused more in addressing this problem. However, the economic policies he implemented appeared to have created a setback in the country’s budget. In addition to the existing deficits prior to his term, deficits continued to increase.

Objectives
This paper aims to give an analysis on the cause and effect of the deficit problem Reagan faced in his second term and an analysis of the strategies he implemented in solving it. This paper also offers alternative strategies that would allow Reagan to reduce the deficits and balanced the budget.

Analysis

The Causes of the Budget Deficits This paper discusses three major cause of the budget deficit during Reagan’s term – tax cut, military spending and recession.
The administration’s policy for tax cut was implemented to break the postwar trends to help the people and make an economic turnaround.
Tax is the major source of

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