USA HISTORY

Detailed explanation-1: -Cutting federal income taxes, cutting the U.S. government spending budget, cutting useless programs, scaling down the government work force, maintaining low interest rates, and keeping a watchful inflation hedge on the monetary supply was Ronald Reagan’s formula for a successful economic turnaround.

Detailed explanation-2: -The “stagflation” and “malaise” that plagued the U.S. economy from 1973 through 1980 were transformed by the Reagan economic program into a sustained period of higher growth and lower inflation. In retrospect the major achievements of Reaganomics were the sharp reductions in marginal tax rates and in inflation.

Detailed explanation-3: -The US experienced mixed consequences. On the one hand, the real GDP improved by 26% (above 1980 figures), from 13.5%, inflation was brought down to 4.1%, and unemployment dropped from 7.6% to 5.5%. But, on the opposite spectrum, the rich became richer. Tax savings were not used for job creation.