What Were the Economic Effects of the Reagan Administration?


Quick Answer

Under President Ronald Reagan, the misery index fell from 19.33 percent to 9.6 percent, unemployment fell to about 5.4 percent and inflation fell from 13 percent to 4.1 percent. His policies were used as a model for later conservative leaders.

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Full Answer

When Ronald Reagan was inaugurated, his first actions included lowering taxes and eliminating regulations in an attempt to jump-start a stagnant economy. This process, often called either Reaganomics or the trickle-down theory, encouraged companies to grow and hire more people.

Reagan was also harshly criticized for actions like the firing of nearly 13,000 striking air traffic controllers and cuts to welfare and other programs for the poor. Though these actions by themselves probably led to lower wages, Reagan also pushed through the Earned Income Tax Credit, a cash benefit for the working poor that helped alleviate some or all of those lowered earnings.

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