Ronald Reagan Impact On The Economy

Throughout the years that the United States has been a nation the economy has fluctuated. During the 1980s specifically, the eight-year span from 1981 to 1989, Ronald Reagan was elected into office and became the 40th president of the United States. “When Ronald Reagan took over the leadership of the United States in 1981, he inherited an economy that was in terrible shape, the worst American economy, in fact, since the Great Depression of the 1930s” (Shmoop Editorial Team 1). This was a significant election because it acted as a turning point for the nation. Reagan was the first republican president elected into office in almost 50 years. The presidents before him were democratic and had different ideas about how an economy should function.
Reagan wanted to have an economy that was thriving. His plan included to, “cut taxes, get control of government spending and get government out of the way so that the entrepreneurial spirit of the American People could be unleashed” (Institute 1). He wanted to create security throughout the nation. Reagan’s presidency jump-started change in the American people and the market place. Ronald Reagan wanted the economy to become a free market place. In order for all of these things to be true, he
The primary and secondary costs of these two interventions were evident. For starters, the primary cost of deregulation included gas prices initially going up from where they originally were. According to the Office of Energy Efficiency and Renewable Energy after deregulation was performed on the gas market the price of it went from $1.19 in 1980 to $1.31 in 1981. Before consumers could reap the benefits of a stable and thriving economy they had to pay. Another primary cost people experienced was the fact that the middle and lower classes received no tax break. As a matter, “ the poorest 1/5 endured income declines of 24% while income of the middle 3/5 of American families stayed flat” (Shmoop Editorial Team 4). Yet it seemed as if the tax cut and income rises in the upper classes made up for the lack of change in the bottom two classes. As for the secondary costs of these interventions one is particularly important to talk about, and that is the fact that people were living in a recession. Before Reagan introduced tax cuts and deregulation the American people lived in a recession. Before people could enjoy a strong economy they had to live in one, which was classified as a recession from 1980 to the middle of 1981. The costs of the interventions (tax cuts and deregulation) involved the prices of goods rising as well as a period of