· Conservatives of the 1980’s felt that “big government” was a problem and that the government should limit costly social programs and not interfere too much with business practices.
· Ronald Reagan led the conservative revolution, serving as President from 1980 – 1988.
Reagan’s Economic Plan:
- large tax cuts that were meant to stimulate the economy
- spending cuts to costly social programs
Mixed Results:
· While the economy grew, the country suffered from a record budget deficit. (Example: $240 billion deficit in 1986)
· The budget deficit was caused by a large increase in military spending, along with massive tax cuts, which made it impossible to create a balanced budget.
President George H.W. Bush:
· Pres. George H.W. Bush continued Reagan’s policies with his famous promise, “Read my lips. No new taxes.”
· However, by 1990, the economy was in a recession, forcing Bush to raise taxes.
President Bill Clinton:
· Pres. Clinton won the election of 1992 on the hopes that he could help the nation’s troubled economy. Clinton went on to win reelection in 1996 as well.
· Clinton was known as a moderate, increasing some taxes and reducing spending, resulting in a drop in the federal budget deficit for three years in a row.
· Pres. Clinton named his wife, Hillary Rodham Clinton, to be in charge of creating a national health care system, a plan that was eventually defeated in Congress for being too costly.
· In 1996, Republicans, led by Newt Gingrich, took control of both houses of Congress and challenged the President on tax increases and spending programs.
· Pres. Reagan increased military spending and pursued a weapons program, known as Star Wars, that could shoot down missiles from space
· This helped to destroy the economy of the Soviet Union, as they were unable to match the U.S. spending on the military and provide for their citizens at the same time.
· Soviet president Mikhail Gorbachev began a policy called glasnost, in which he allowed more freedom of speech and the press.
· Gorbachev also signed an arms control treaty, called the INF Treaty, with Pres. Reagan in 1987.
· Eventually, however, Gorbachev was forced to resign in 1991, and the Soviet Union ceased to exist.
· As a result, many Soviet republics eventually gained their independence, such as Lithuania, Ukraine, Georgia, and Uzbekistan.
