Ronald Reagan Impact On America

Reagan was able to increase productivity growth in America, which although might seem like a minor effect, drastically impacted the country. Productivity growth was at 2.8% during the Carter administration, but increased quite profoundly to 4% during the Reagan era (England, 2009). Productivity increases in a country when more hours are worked and more product is produced by the workers per hour. The increase in productivity during Reagan’s presidency can likely be attributed to the decrease in income tax and addition of new jobs. As taxes decreased, there was an increased incentive for work. As well, some of America’s previously unemployed now occupied jobs provided by Reagan, and thus had an exceedingly large inducement to work hard and continue …show more content…
Ronald Reagan deregulated banks and corporations because he believed strongly in the idea of free-market and free-enterprise economics. This resulted directly in increased loans and investments because deregulation caused little restrictions on the companies who would instate these loans. Not only did many of these businesses later go into bankruptcy because of this, but as well, it would have a lasting effect for decades. Citizens of the United States would be encouraged by brokers to utilise subprime loans even though the citizens were less than informed about the possible risks which the loans bring. When these citizens who bought the loans defaulted, the companies who loaned the money as well as numerous hedge funds lost substantial amounts of money. The entire economy of the country then went into a recession as a cause of this. Henry Paulson, the U.S Secretary of The Treasury during the 2007-08 crisis said that the “stability of our capital markets” is in need of “a strong regulator (Toplin, 2008).” Although Paulson did not directly mentioned that Reagan was a cause of this, it is lucid that he can be accredited for the issue. Deregulating banks and corporations may have seemed to be a robust idea, however the …show more content…
In order to win the Cold War, Ronald Reagan decided to increase America’s defense budget. In current dollars, Reagan increased defense spending from $339.6 billion in 1981 to $465.6 billion in 1987 (Schneider, 2009). In retrospect, it was evident that the Soviet economy was collapsing. Reagan did not invest in the idea of a Soviet decline and rather increased defense spending in order to accomplish his “Star Wars” defense initiative and substantial vision.
World-renowned journalist Robert Parry criticised Reagan's decisions to go through with an increase in defense spending. Parry said that beyond de-regulating banks and corporations, Reagan went through with “a massive military build-up even though the chief U.S rival, the Soviet Union, was in rapid and irreversible decline.” (Parry,