The troubles of the 1970s opened the way for a political shift. A conservative movement that had grown since Barry Goldwater's campaign of 1964, with think tanks, magazines and new religious groups such as the Moral Majority (1979), found its leader in a former actor and governor of California.
Key idea
Ronald Reagan won in 1980 and 1984 on lower taxes, less regulation and a stronger defense. Supporters credit his policies with the long expansion after 1982, while critics point to larger deficits and widening inequality.
| Policy | What was done |
|---|---|
| Taxes | The Economic Recovery Tax Act (1981) cut income tax rates by about a quarter; the top rate fell from 70 to 50 percent. The Tax Reform Act (1986), passed with bipartisan votes, lowered the top rate to 28 percent and closed many deductions |
| Regulation | Fewer and lighter federal rules for business and energy; air traffic controllers who struck illegally in 1981 were fired |
| Defense | A large military buildup and the Strategic Defense Initiative (1983) |
| Money | The Federal Reserve kept interest rates high; inflation fell from about 13.5 percent (1980) to under 4 percent by 1983, after a deep recession in 1981 and 1982 |
Why it works
What does the record show? Unemployment peaked at 10.8 percent in late 1982, then fell to about 5.3 percent by 1989, during an expansion that lasted until 1990. Federal deficits grew, and the national debt roughly tripled during the decade, since spending, especially on defense and entitlements, rose while tax rates fell. Incomes rose fastest at the top. Supporters argue that lower tax rates and less regulation released growth and that the buildup helped end the Cold War; critics argue that the deficits burdened the future and that the gains were unevenly shared. Reagan also appointed Sandra Day O'Connor, the first woman on the Supreme Court (1981).
Work it through
Worked example: Facts first, then readings
Separate the facts from the judgments: "Taxes were cut in 1981. The cuts caused the boom. The debt tripled. The deficits were dangerous."
- Facts: tax rates were cut in 1981 (and again in 1986); the national debt roughly tripled in the 1980s.
- Judgments: that the cuts caused the boom (supporters' reading), and that the deficits were dangerous (critics' reading).
- A historian states the facts and then each side's reading, with its evidence.
Answer: Two facts, two interpretations.
Common mistake
Students state one side's judgment as fact. Describe the policies and the record (tax cuts in 1981 and 1986, rising deficits, falling inflation), then each side's reading of them. Words like "success" or "failure" belong to the debate, not to the facts.