Reaganomics

[8][9] Critics point to the widening income gap, what they described as an atmosphere of greed, reduced economic mobility, declining real median wages, and the national debt tripling in eight years which ultimately reversed the post-World War II trend of a shrinking national debt as percentage of GDP.

Empirical methods Prescriptive and policy Defunct Newspapers Journals TV channels Websites Other Congressional caucuses Economics Gun rights Identity politics Nativist Religion Watchdog groups Youth/student groups Social media Miscellaneous Other Prior to the Reagan administration, the United States economy experienced a decade of high unemployment and persistently high inflation (known as stagflation).

President Jimmy Carter had begun phasing out price controls on petroleum while he created the Department of Energy.

Much of the credit for the resolution of the stagflation is given to two causes: renewed focus on increasing productivity[13] and a three-year contraction of the money supply by the Federal Reserve Board under Paul Volcker.

[15] The real (inflation adjusted) average rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan.

[20] During the Nixon and Ford Administrations, before Reagan's election, a combined supply and demand side policy was considered unconventional by the moderate wing of the Republican Party.

[6] Similarly, in 1976, Gerald Ford had severely criticized Reagan's proposal to turn back a large part of the Federal budget to the states.

Ronald Reagan also cited the 14th-century Arab scholar Ibn Khaldun as an influence on his supply-side economic policies, in 1981.

"[21] Reagan lifted remaining domestic petroleum price and allocation controls on January 28, 1981,[22] and lowered the oil windfall profits tax in August 1981.

[27][28][29][30] In 1983, Democrats Bill Bradley and Dick Gephardt had offered a proposal; in 1984 Reagan had the Treasury Department produce its own plan.

[16][37][38] As a short-run strategy to reduce inflation and lower nominal interest rates, the U.S. borrowed both domestically and abroad to cover the Federal budget deficits, raising the national debt from $997 billion to $2.85 trillion.

[7] Some economists have stated that Reagan's policies were an important part of bringing about the third longest peacetime economic expansion in U.S.

[56] The job growth (measured for non-farm payrolls) under the Reagan administration averaged 168,000 per month, versus 216,000 for Carter, 55,000 for H.W.

[citation needed] In the 1980s, industrial productivity growth in the United States matched that of its trading partners after trailing them in the 1970s.

By 1990, manufacturing's share of GNP exceeded the post-World War II low hit in 1982 and matched "the level of output achieved in the 1960s when American factories hummed at a feverish clip".

[62] The average real hourly wage for production and nonsupervisory workers continued the decline that had begun in 1973, albeit at a slower rate, and remained below the pre-Reagan level in every Reagan year.

In nominal terms, median household income grew at a compound annual growth rate (CAGR) of 5.5% during the Reagan presidency, compared to 8.5% during the preceding five years (pre-1975 data are unavailable).

[64] Real median family income grew by $4,492 during the Reagan period, compared to a $1,270 increase during the preceding eight years.

[69][70] According to Don Mitchell, the increased cuts to spending on housing and social services under Reagan was a contributing factor to the homeless population nearly doubling in just three years, from 1984 to 1987.

The only economic variable that was lower during period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s.

Economic analyst Stephen Moore stated in the Cato analysis, "No act in the last quarter century had a more profound impact on the U.S. economy of the eighties and nineties than the Reagan tax cut of 1981."

[100] Milton Friedman stated, "Reaganomics had four simple principles: Lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy.

[105] In 2006, the IRS's National Taxpayer Advocate's report characterized the effective rise in the AMT for individuals as a problem with the tax code.

He argues that the Reagan era tax cuts ended the post-World War II "Great Compression" of wealth held by the rich.

[110] William Niskanen noted that during the Reagan years, privately held federal debt increased from 22% to 38% of GDP, despite a long peacetime expansion.

The number of pages added to the Register each year declined sharply at the start of the Ronald Reagan presidency breaking a steady and sharp increase since 1960.

The increase in the number of pages added per year resumed an upward, though less steep, trend after Reagan left office.

A 2016 study by the Congressional Research Service found that Reagan's average annual number of final federal regulatory rules published in the Federal Register was higher than during the Clinton, George W. Bush or Obama's administrations, even though the Reagan economy was considerably smaller than during those later presidents.

[115] Another study by the QuantGov project of the libertarian Mercatus Center found that the Reagan administration added restrictive regulations — containing such terms as "shall," "prohibited" or "may not" — at a faster average annual rate than did Clinton, Bush or Obama.

They projected rapid growth, dramatic increases in tax revenue, a sharp rise in saving, and a relatively painless reduction in inflation.