Reaganomics

Paper Summary:

This paper explains that the Program for Economic Recovery introduced by Reagan during 1981 had four major goals such as abatement in the government expenditure, a decline in the marginal tax rates on capital and labor incomes, reduction in economic control and reduction in rate of inflation regulating the growth in the supply of money. The author points out that critics attacked Reaganomics on the grounds that this period witnessed the worst-ever recession since the Great Depression of the Thirties and the public debt increased about 2.85 times more in 1989 in comparison to 1981, the end of the Carter presidency. The paper states that Reaganomics could not lead sufficiently to an economic revolution because it did not make any basic changes in the discernment of the federal government; Reaganomics is considered to be only a temporary break in the progressive loss of emancipation.

From the Paper:

"A sustained growth of the economy with enhanced growth and declining rate of inflation was advocated with its recovery from the stagflation and the maladies of US economy from 1973 to 1980 through these economic strategies. The enhancement in economic productivity and growth was even considered the highest. The per hour production in the business sector almost seem to be freeze during the period of Carter enhanced at the rate of 1.4 percent in the periods of Reagan. The productivity appeared to have increased at the rate of 3.8 percent per annum in the manufacturing sector which is considered to be a record during the time of peace. The Banks were permitted to advance credit in a broader set of assets with reduction in the scope of antitrust laws. The variations in the federal tax code were visualized to be considerable. The individual income tax rate had been declined from the then 70 percent to 28 percent. The same was the case with the corporate taxation rates which was declined from 48 percent to 34 percent. "

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