Exposé Ronald Reagan.

Introduction :

Hello everybody, so today i’m gonna talk to you about Ronald Reagan and some of what he did, especially in financial and political matters. Ronald Regan was the fourtieth president of the United States and before his mandate he was governor of California. Reagan was a democrat but then his views changed and he became a republican in the fifties and he got elected as president of the USA in 1980 and then in 1984. When he left the oval in 1989, Reagan’s approval’s rating was from 68 percent, so he was some of the most appreciate president of the modern era. Now, let’s focus on his policy.

 To do so, I studied a set of documents, with a text, a message to the Congress transmitting a proposed Constitutional Amendment on Prayer in School, said by Ronald Reagan himself on the seventeenth of May, nineteen eighty-two, and a mix of documents, two caricatures and two campaign tracts. These documents are dated from the same period because the proposition from Reagan was made in 1982 and the caricatures was published in newsletter in 1983. In year 1982, the Vietnam war was ended since almost seven years but it was still present in minds so the American context was a bit special. Everybody was asking himself questions about his life and the sense of life when more than fifty eight thousands of American soldiers died and between five hundred ten thousands and more than one million soldiers, all nations confused, died. At the same time, the word AIDS was used for the first time as the disease became more and more present in society. The context in America was very negative, people had dark thoughts.

On the economical and financial side too, the context and the thoughts were not really enthousiastic as in autumn, a violent recession broke the inflation. It was the biggest recession since world war two. To resolve this crisis, Ronald Reagan made compromises with the Democrats in order to reduce the public deficit: one third will be compensated by higher taxes and the two other thirds by a decrease of the government spending. This decrease, the solution chose by Reagan will cause a huge cut in the federal social programs.

We are gonna ask why and how as Reagan been re-elected for a second mandate, because we can imagine he was in a bad position at the time, due to the economic situation? To answer this question, we must first study why Reagan’s first mandate was criticized and how he resolved the economic crisis but also how he managed to create himself a new image, a strong image that got him elected again.

1. The controversial mandate of Reagan

Because of the economic crisis but also of the social context in America during his first mandate, Reagan was not so popular at the time.

1. The biggest recession since world war two

The violent recession was caused by the law Balanced Budget Amendment which aimed to balance the federal budget but unfortunately it as followed by a strong recession, partly because of the monetarist policy of the Fed President, Paul Volcker. The American crisis of 1982 was also caused by the second oil crash and it was marked by a decrease of 2% of the gross domestic product. The unemployment rate reached its higher points in 1982 and 1983, it was 10,8% and 10,4%. The Tax Equity and Fiscal Responsibility Act from 1982 was the biggest tax augmentation in peace time in the USA. In year 1983 was the cartoon from the LA Herald published, mocking the impact of the secretary of the Interior of Reagan on the economy but his impact on the money of the American people too. He is the man on the left of the cartoon and he was the US Secretary of interior from 1981 to 1983. James G. Watt was one of the most criticized members of Reagan’s cabinet. This cartoon can explain two things, firstly how Reagan’s government and moreover Watt focused on economy and money more than the environment or anything else in American policy but it is also a critic to the “big government” that appeared with Federal Agencies.

As we can see on the flyer of Reagan’s campaign, he wanted to “make America great again”. He promised the “Reagan Revolution”, which aim was to combat the huge depression by reducing government spending, taxes and regulation: it was the “laissez-faire” policy. Reagan economic policy, called “Reaganomics” was resumed in one sentence, a kind of slogan: “Government is not the solution to our problem, government is the problem." So now we will see if it worked ?

1. A huge cute in federal social programs

Because he wanted to reduce the spendings of the government, Reagan decide to not subsidize American social programs anymore. For example, all the budgets from programs that aren’t linked to the department of Defense like Medicaid, federal programs of education, the Supplemental Nutrition Assistance Program, the Environmental Protection Agency were not helped anymore… His administration wanted to protect the Social Security and Medicare but at the same time, they tried to take handicapped people out of the lists of social security, so it was obvious that Reagan wanted to assure his financial balance sheet whatever it takes. This methods are also chocking for someone who was Democrat until his 51th birthday!

If we study the second cartoon, published the thirty-one of January, 1983 in the Guardian Weekly, we can see that it is a very narrative cartoon. In the pack of hounds chasing the man, each one is named after an economic phenomena or special tax. You know what are social security tax, increase of local and state tax or even inflation but the last dog needs clarification. Bracket creep is a situation when where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power, as the website Investopedia explained it. To explain it in a simple way if I can: imagine someone who earns 20 bananas a year, and must pay 20% of tax on his earnings above a step of 5 bananas: the amount of his taxes will be 15 multiplied by twenty percent: 3 bananas. The following situation is that this person wage increase from 5% but his tax step only increase from 2%: he must pay: (21 bananas – 5.1 bananas)x20%=3.18 bananas: the proportion of this person’s income that ended into tax has increased.

...