Jr Thesis Outline

1113 words - 4 pages

Daniel J. AmirataMr.GreenMUSH10 November 2014The Effect Reaganomics had on American Citizens Thesis: Though Ronald Reagan's economic policies were profoundly successful toward the economy; nevertheless, a wealth gap was created between the upper class and lower class because the wealthy prospered while the middle/lower class American citizen's income maintained the same.Introduction:When Ronald Reagan first introduced his economic policies of "supply side economics", he had good intentions to better the economy and make all citizens benefit from this. These economic policies did indeed end up immensely growing the economy, boosting the stock market, and lowering inflation. However, as the greater tax cuts for the wealthy and for businesses made them richer, they could not only have more money but inject it into the economy, such as stocks, the incendiary Wall Street, money in savings account that increased due to lower inflation, and growing businesses all were ways they could get even more rich.On the other hand, the poor were already getting less tax cuts, and most of them strictly relied on wages to survive. The "trickle down" effect could not effectively reach the lower class because of this.Economic Recovery Tax Act of 1981 passed by Reagan was a federal law enacted in the United States. This was to stimulate economy, supposing that lowering income tax will inject more money into the economy.This tax act's incentive was an initial effort my Ronald Reagan to produce a statement for the feeble economy coming out of the 1970's. The oil shocks of 1973 and 1979 added to the already rising inflation in America. As a result, United States industries production declined as a whole.The inflation rate from 1970 through 1979 was 7.06%; compared to the average of 2.5% through the previous decades in the century. As a result, unemployment also rose. This is known as "stagflation", where the economic growth is chained down to inflation and unemployment.Reagan took advantage of this recession by inventing new economic policies to boost the ailing economy from the 70's. After proposing these revolutionary economic policies Reagan proposed his famous quote in the 1980 presidential debate between Reagan and Jimmy Carter, "Are you better off than you were four years ago?"Law was "to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings, and for other purposes" - Ronald ReaganThe tax cuts from this act provided 300 billion dollars back into private American citizens' hands. It also provided 50 billion for businesses from 1983 through 1985.Inflation under President Ronald Reagan descended overall through his two terms due to Paul Volcker's deflation tactics, which benefitted large-scale industries more than middle and lower class American citizens.Although Reagan is largely credited for the deflation...

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