Economic negatives during Reagan’s 8 years, not already mentioned, should include the stock market crash of 1987, the US moving from being the world’s largest creditor to being the world’s largest debtor, and some government domestic programs being forced to face limited funding (Medicaid and Food Stamps, for example). But, in general, most economists stress that Reagan’s policies (especially his tax policies) encouraged economic growth and brought about the economic strength exhibited in the 1990s.
Many economic decisions take longer than a few months to have a noticeable impact. Tax issues, frequently, don’t exhibit their full impact until well after the first year of compliance. Companies and individuals need time to adjust, acquire funds, and budget accordingly. Not directly related to the performance of Reagan’s administration or the US economy, but still …show more content…
Latin American countries, as a result, quadrupled their external debt obligations. The dollar amount of these debts represented approximately 50% of the region's gross domestic product. Naturally, the debt service (which includes interest payments and the repayment of principal) grew exceptionally fast.
The 1970s through the early 1980s is considered the Latin American "lost decade". Latin America’s foreign debt eventually greatly exceeded their earning power and, as a result, they were not able to repay their loans. They were constantly refinancing.
Interest rates started increasing in the US and Europe. As a result, refinancing these enormous Latin America debts became even more expensive. With US interest rates rising, the value of the US dollar also increased, making Latin American currencies worth less. This decline in purchasing power caused enormous economic damage to Latin America. Suddenly, the world markets were shocked by the mathematical reality expressed by Mexico's announcement in
Many economic decisions take longer than a few months to have a noticeable impact. Tax issues, frequently, don’t exhibit their full impact until well after the first year of compliance. Companies and individuals need time to adjust, acquire funds, and budget accordingly. Not directly related to the performance of Reagan’s administration or the US economy, but still …show more content…
Latin American countries, as a result, quadrupled their external debt obligations. The dollar amount of these debts represented approximately 50% of the region's gross domestic product. Naturally, the debt service (which includes interest payments and the repayment of principal) grew exceptionally fast.
The 1970s through the early 1980s is considered the Latin American "lost decade". Latin America’s foreign debt eventually greatly exceeded their earning power and, as a result, they were not able to repay their loans. They were constantly refinancing.
Interest rates started increasing in the US and Europe. As a result, refinancing these enormous Latin America debts became even more expensive. With US interest rates rising, the value of the US dollar also increased, making Latin American currencies worth less. This decline in purchasing power caused enormous economic damage to Latin America. Suddenly, the world markets were shocked by the mathematical reality expressed by Mexico's announcement in