EQ
• To what extent did Reagan’s foreign policy
represent a return to traditional themes of
Cold War and power politics?
Conservative President
• New Federalism:
• New Federalism was Reagan’s social program
for America which called for the following:
– cutting taxes and government spending
Supply-Side
Economics
Supply-Side Economics
• Supply-Side Economics:
• the economic theory that tax cuts would
improve the economy in the following ways:
– businesses would have more money to invest
– consumers would also have more money to spend
– as businesses invested and consumers spent more
business would grow
– as business grew more people would be employed
– more employment would increase tax revenues to
the government
Supply-Side Economics
• Reagan cut taxes by 25%
Reaganomics
• Deficit Spending:
– an economic practice where more money is spent
than is taken in by tax revenues
– eight straight years of deficit spending under
Reagan
– mostly on military and social spending
– national debt reached $2 trillion
Reaganomics
• Deregulation:
• removing many government rules that limited
business competition
– most anti-trust laws not enforced
Debtor Nation
• Debtor Nation:
– eight years of deficit spending turned America into
the world’s largest debtor nation
– first time since World War I
– U.S. owed more money to other nations than
other nations owed to U.S.
– annual interest payments on U.S. debt $150 billion
“In this present crisis,
government is not the
solution to our problem;
government is the
problem”.
Ronald Reagan
Foreign Policy
• Renewed American Power:
– Reagan restored American strength and power abroad
in the following ways:
– sent U.S. military to defeat communist takeover in
Grenada
– supported Contra movement to overthrow communist
dictatorship in Nicaragua {Sandinistas}
– sent U.S. jets to bomb terrorist nation of Libya
– sent military equipment to help Afghan guerillas fight
Soviets
– spent billions to develop “Strategic Defense Initiative”
to destroy enemy missiles {called Star Wars}
Foreign Policy
• Iran-Contra Affair:
– investigators revealed that members of Reagan
Administration had done the following:
– illegally sold weapons to Iran {a terrorist nation}
– used the money to help the Contra guerillas in
Nicaragua without Congressional approval
Reagan Under
Fire
“A few months ago I
told the American
people I did not trade
arms for hostages.
My heart and my
best intentions still
tell me that is true,
but the facts and the
evidence tell me it is
not”.
President Reagan
Iran-Contra
Connection
Star Wars
Program
*Strategic Defense
Initiative (SDI)
The Reagan Doctrine
*Provide overt and covert aid to
anti-communist resistance
movements in an effort to
“rollback” Soviet backed
communist governments in Asia,
Africa and Latin America”.