Reaganomics (jan 20, 1981 – jan 20, 1989)

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In 1981, Ronald Reagan became the President of the United States and carried out policies that were influenced by Milton Friedman’s economic policies of how stagflation was partly caused by large national deficits from government spending. Reagan responded to the high unemployment and high inflation through policies known as supply-side economics, or trickle-down economics. In contrast to Keynesian Economics, these policies were a right-wing shift towards classical liberalism as it involved reduced income and business taxes and reduced business regulations, thus providing greater economic freedom. It was believed that by lowering taxes for corporations and the wealthy, they would be inspired to invest more. Consequently, Reagan argued that increased private investment and government military spending would “trickle down” through the economy to benefit the working class.

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