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The USA, 1955–92: Conformity and Challenge

New directions in economic policy

  • 3 things to know
  • Paper 2

Overview

Recall questions on the elements of Reaganomics, the effect on workers and families, the deficits, the savings and loan crisis, and Bush's broken tax pledge.

What you need to know

Answer each one before you reveal it.

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Key term

What was 'Reaganomics'?

Key term

What were the main elements of Reagan's economic policy?

Who and when

How did Reagan's policies affect workers?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What happened to the budget and trade deficits under Reagan?

    Model answer

    Both grew sharply.

  2. 2

    What was 'Reaganomics'?

    Model answer

    Reagan's policy of tax cuts, deregulation and reduced welfare, combined with high defence spending.

  3. 3

    Why did Bush's tax pledge matter?

    Model answer

    He broke his 'read my lips: no new taxes' promise, which damaged him politically.

  4. 4

    What were the main elements of Reagan's economic policy?

    Model answer

    Large income tax cuts, deregulation, restraint of domestic spending, a defence build-up, and tight money to break inflation.

  5. 5

    How did Reagan's policies affect workers?

    Model answer

    The PATCO dismissals emboldened employers, union membership fell sharply, and real wages for manual workers stagnated or declined.

  6. 6

    How did economic policy affect families?

    Model answer

    Cuts to food stamps, school meals and family support hit the working poor, while tax cuts benefited higher earners most.

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AThe government admitted 96 dead and 333 wounded.
BOther estimates run to several hundred dead.
COpponents claimed thousands.

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