United States: The Reagan Years

The Reagan Years

The nation enthusiastically responded to Ronald Reagan's neoconservative message as he soundly defeated Carter and third-party candidate John Anderson to become, at the age of 70, the oldest man to be elected president. Reagan's coattails proved to be long as the Republicans made large gains in the House of Representatives and won control of the Senate for the first time since 1954, ushering in a new wave of conservatism. His program of supply-side economics sought to increase economic growth through reduced taxes which would in turn create even greater tax revenue. Critics argued that his tax cuts only benefited corporations and wealthy individuals. Reagan drastically cut spending on social programs as part of his vow to balance the federal budget.

In labor disputes, Reagan was decidedly antiunion. This was never more evident than in 1981 when he fired 13,000 striking air traffic controllers. In Mar., 1981, Reagan was wounded in an assassination attempt but fully recovered, dispelling doubts regarding his age and health. The U.S. economy continued to worsen; in 1983 the unemployment rate reached its highest point since the Great Depression at almost 11%. By the end of that year, however, oil prices began to drop, slowing the inflation rate and helping the economy to begin a recovery. Reagan's deregulaton of the banking, airline, and many other industries spurred enormous amounts of economic activity. In 1984 the unemployment rate fell and the dollar was strong in foreign markets. With the economy recovering, Reagan was unstoppable in the 1984 presidential election.

Democratic nominee Walter F. Mondale chose U.S. Representative Geraldine Ferraro as his running mate; she was the first woman to gain a major party's vice presidential nomination. Reagan scored an overwhelming victory, carrying 49 states and winning a record 525 electoral votes. Economic recovery did not last, however; while Reagan was cutting government funding for social programs the defense budget skyrocketed to levels not seen since World War II. The federal budget deficit also soared and in 1987, Reagan submitted the first trillion-dollar budget to Congress. In addition, the deregulated economy proved extremely volatile; financial scandals were prevalent and the trade imbalance grew. Finally in 1987 the stock market crashed, falling a record 508 points in a single day.

Reagan's foreign policy was aggressively anti-Communist as he discarded the policy of détente employed by Nixon, Ford, and Carter. He revived cold war rhetoric, referring to the Soviet Union as the “evil empire” and used increased defense spending to enlarge the U.S. nuclear arsenal and fund the Strategic Defense Initiative, a plan popularly known as “Star Wars.” In 1981, Reagan imposed sanctions against Poland after the establishment of a military government in that country. Reagan also sought aid for the Contras—counterrevolutionaries seeking to overthrow the Marxist-oriented Sandanista government in Nicaragua. At the same time the United States was secretly mining Nicaraguan harbors.

In 1983 241 U.S. marines stationed in Beirut, Lebanon as part of a UN peacekeeping force were killed by terrorists driving a truck laden with explosives in a suicide mission. Later that year Reagan ordered the invasion of the tiny Caribbean nation of Grenada; the action was roundly criticized by the world community, but succeeded in toppling the pro-Cuban regime. In 1986 the space shuttle Challenger exploded shortly after liftoff, killing the entire seven-person crew, including six astronauts and a civilian schoolteacher. Reagan's aggressive policies in the Middle East worsened already bad relations with Arab nations; he ordered (1986) air strikes against Libya in retaliation for the Libyan-sponsored terrorist attack in West Berlin that killed two American servicemen.

Although the president had vowed never to negotiate with terrorists, members of his administration did just that in the Iran-contra affair. Against the wishes of the Secretary of State and the Secretary of Defense, Reagan officials arranged the illegal sale of arms to Iran in exchange for the release of American hostages in the Middle East. The profits from the sales were then diverted to the Contra rebels in Nicaragua. Reagan improved his image before he left office, however, by agreeing to a series of arms reduction talks initiated by Soviet president Mikhail Gorbachev. Reagan was also able leave a powerful legacy by appointing three conservative Supreme Court justices, including Sandra Day O'Connor, the first woman to serve on the high court.

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