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-SideEconomics

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 UnderFire

“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-ContraConnection

Star WarsProgram

*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”.