that this imbalance had to be eliminated, Reagan
turned a deaf ear to those who recommended that
he attempt to balance the budget by making major
cuts in this colossal drain on the federal coffers.
Even though the economy revived substantially in
1984 and inflation waned, the deficit continued to
grow, and the federal bureaucracy that Reagan was on
record as wanting to shrink became larger. Audiences
that attended his public appearances and listened to
his speeches spurred the president on in his efforts to
increase defense spending. His charisma and per-
sonal charm allayed many of the fears people might
have harbored about his economic policies.
Whenever Reagan called for stronger armed
forces in his speeches, he elicited cheers and ap-
plause from his audiences. Whereas his economic
advisers tried to convince him of the stark realities as-
sociated with uncontrolled overspending, an adoring
and largely uninformed public gave him the impe-
tus to continue the policies he was pursuing against
the better judgment of those who were dealing at
first hand with numbers that simply did not add up.
Impact The immediate impact of Reaganomics was
devastating to the poorer members of American so-
ciety. Whereas affluent citizens and corporations
benefited from the newly imposed economic poli-
cies, many of the poor suffered greatly. Reagan’s
most strident critics accused him of being indiffer-
ent to the problems of the poor.
The cuts he made in welfare programs designed
to help poor people and those incapable of helping
themselves led to a great increase in poverty, particu-
larly in the nation’s large cities. Thousands of people
who needed custodial care were forced onto the
streets, resulting in a staggering increase in home-
lessness that continued well into the twenty-first cen-
tury.
Bread lines and soup kitchens resembling those
seen during the Great Depression of the 1930’s be-
gan to spring up throughout the country. Thou-
sands of people slept in public parks, beneath high-
way bridges, or wherever they could find shelter. In
extreme weather, many people died from exposure,
even though efforts were made through such chari-
table agencies as the Salvation Army and the Red
Cross to provide them with shelter from extreme
heat and cold.
Because a fundamental tenet of Reaganomics
was to reduce governmental regulation of big busi-
ness, many environmental regulations imposed by
earlier administrations were relaxed through the
connivance of Reagan and his secretary of the inte-
rior, James G. Watt. The administration approved
measures that promoted the corporate use of fed-
eral lands for drilling, mining, and harvesting tim-
ber. A quarter century after Ronald Reagan left the
presidency, many results of his economic policies—
Reaganomics—were still evident.Further Reading
Campagna, Anthony C.The Economy in the Reagan
Years: The Economic Consequences of the Reagan Ad-
ministration. Westport, Conn.: Greenwood Press,- Chapters 3, 8, and 9 deal respectively with
the beginnings, implementation, and conse-
quences of Reagan’s economic policies.
Johnson, Dary.The Reagan Years. San Diego, Calif.:
Lucent Books, 2004. In this overview directed to
juveniles, Johnson devotes chapter 2 to Reagan-
omics and covers the subject well.
Nester, William R.A Short Histor y of American Indus-
trial Policy. New York: St. Martin’s Press, 1998.
Chapter 6, “Reaganomics Versus Clintonomics,
1981-2000,” is particularly relevant. A compelling
contrastive consideration.
Smith, Roy C.Comeback: The Restoration of American
Banking Power in the New World Economy.Boston:
Harvard Business School Press, 1993. Chapter 1,
“Reaganomics: Vision or Voodoo?,” gives objec-
tive overviews of the economic policies of the Rea-
gan administration.
Stockman, David A.The Triumph of Politics: The Inside
Stor y of the Reagan Revolution. New York: Avon, - Reagan’s former budget director explains
the pitfalls of Reaganomics and exposes the in-
herent weaknesses of the economic policy.
Strobel, Frederick R.Upward Dreams, Downward Mo-
bility: The Economic Decline of the American Middle
Class.Savage, Md.: Rowman & Littlefield, 1992.
An interesting, although neither detached nor
objective, view of the topic is found in chapter 8,
“Reaganomics: A Wolf in Sheep’s Clothing.”
R. Baird Shuman
See also Business and the economy in the United
States; Conservatism in U.S. politics; Economic Re-
covery Tax Act of 1981; Homelessness; Reagan, Ron-
ald; Reagan Doctrine; Recessions; Unemployment
in the United States.812 Reaganomics The Eighties in America