View source for Reaganomics

{{Short description|Economic policies of Ronald Reagan}}
{{Distinguish|Political positions of Ronald Reagan}}
{{Use American English|date=June 2025}}
{{Use mdy dates|date=December 2020}}
[[File:President Ronald Reagan addresses the nation from the Oval Office on tax reduction legislation.jpg|thumb|upright=1.2|right|Reagan gives a televised address from the [[Oval Office]], outlining his plan for [[tax cuts|tax reductions]] in July 1981.]]
'''Reaganomics''' ({{IPAc-en|r|eɪ|g|ə|ˈ|n|ɒ|m|ɪ|k|s|audio=En-us-Reaganomics.oga}}; a [[portmanteau]] of ''Reagan'' and ''economics'' attributed to [[Paul Harvey]]),<ref>{{cite news |url=https://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022802096_2.html |newspaper=The Washington Post |title=Broadcaster Delivered 'The Rest of the Story' |access-date=March 1, 2009 |date=March 1, 2009 |first=Joe |last=Holley |archive-date=February 17, 2011 |archive-url=https://web.archive.org/web/20110217050212/http://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022802096_2.html |url-status=live }}</ref> or '''Reaganism''', were the [[Neoliberalism|neoliberal]]<ref>{{cite book |editor1-last=Springer |editor1-first=Simon |editor2-last=Birch |editor2-first=Kean |editor3-last=MacLeavy |editor3-first=Julie |date=2016 |title=The Handbook of Neoliberalism |url=https://www.routledge.com/The-Handbook-of-Neoliberalism/Springer-Birch-MacLeavy/p/book/9781138844001 |publisher=[[Routledge]] |pages=[https://books.google.com/books?id=M5qkDAAAQBAJ&pg=PA3 3], [https://books.google.com/books?id=M5qkDAAAQBAJ&pg=PA65 65], [https://books.google.com/books?id=M5qkDAAAQBAJ&pg=PA144 144] |isbn=978-1138844001 |access-date=October 10, 2020 |archive-date=October 20, 2020 |archive-url=https://web.archive.org/web/20201020154754/https://www.routledge.com/The-Handbook-of-Neoliberalism/Springer-Birch-MacLeavy/p/book/9781138844001 |url-status=live }}</ref><ref>{{cite book|last=Gerstle|first=Gary|author-link=Gary Gerstle|date=2022|title=The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era|url=https://global.oup.com/academic/product/the-rise-and-fall-of-the-neoliberal-order-9780197519646?cc=us&lang=en&|location=|publisher=[[Oxford University Press]]|pages=121–128|isbn=978-0197519646|access-date=July 29, 2022|archive-date=June 26, 2022|archive-url=https://web.archive.org/web/20220626220259/https://global.oup.com/academic/product/the-rise-and-fall-of-the-neoliberal-order-9780197519646?cc=us&lang=en&|url-status=live}}</ref><ref>{{cite book|last=Bartel|first=Fritz|date=2022|title=The Triumph of Broken Promises: The End of the Cold War and the Rise of Neoliberalism|url=https://www.hup.harvard.edu/catalog.php?isbn=9780674976788|location=|publisher=[[Harvard University Press]]|pages=18–19|isbn=9780674976788|access-date=August 9, 2022|archive-date=August 9, 2022|archive-url=https://web.archive.org/web/20220809023730/https://www.hup.harvard.edu/catalog.php?isbn=9780674976788|url-status=live}}</ref> [[economics|economic]] policies promoted by [[United States President|U.S. President]] [[Ronald Reagan]] during the 1980s. These policies focused mainly on [[supply-side economics]]; however, opponents (including some Republicans) characterized them as "[[trickle-down economics]]" or '''Voodoo Economics''',<ref name="Roubini-1997"/><ref name="Voodoo_economics-2004"/> while Reagan and his advocates preferred to call it [[free market economy|free-market economics]].

The pillars of Reagan's economic policy included increasing defense spending, slowing the growth of [[United States federal budget|government spending]], reducing the [[federal income tax]] and [[capital gains tax]], reducing government [[regulation]], and tightening the money supply in order to reduce [[inflation]].<ref name="nisk_concise">{{cite encyclopedia |last1=Niskanen |first1=William A. |author-link=William A. Niskanen |editor=[[David R. Henderson]] |encyclopedia=[[Concise Encyclopedia of Economics]] |title=Reaganomics |url=http://www.econlib.org/library/Enc1/Reaganomics.html |year=1992 |edition=1st |publisher=[[Library of Economics and Liberty]] |access-date=August 29, 2013 |archive-date=April 15, 2023 |archive-url=https://web.archive.org/web/20230415021108/https://www.econlib.org/library/Enc1/Reaganomics.html |url-status=live }} {{OCLC|317650570|50016270|163149563}}</ref>

The results of Reaganomics are still debated. Supporters point to the end of [[stagflation]], stronger [[GDP]] growth, and an entrepreneurial revolution in the decades that followed.<ref>{{cite magazine|url=https://www.bloomberg.com/news/articles/2004-06-20/reagans-economic-legacy|title=Reagan's Economic Legacy|magazine=Bloomberg Businessweek|date=June 21, 2004|access-date=July 2, 2018|archive-date=June 26, 2012|archive-url=https://web.archive.org/web/20120626061110/http://www.businessweek.com/magazine/content/04_25/b3888032_mz011.htm|url-status=live}}</ref><ref>{{cite book|title=Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader|author=Dinesh D'Souza|pages=124–125|date=1997|publisher=Touchstone|isbn=0-684-84823-6}}</ref> Critics point to the widening income gap, what they described as an atmosphere of greed, [[Great Regression|reduced economic mobility]], and [[National debt of the United States|the national debt]] tripling in eight years which ultimately reversed the post-World War II trend of a shrinking national debt as percentage of GDP.<ref name="U.S. Debt"/><ref>{{cite book|title=The Conscience of a Liberal|author=Paul Krugman|date=2007|publisher=W.W. Norton & Company|isbn=978-0-393-06069-0|url=https://archive.org/details/conscienceoflibe00krug}}</ref>

==Historical context==
{{Ronald Reagan series}}
{{Neoliberalism sidebar}}
{{conservatism US|history}}
[[File:Inflation and oil price 1969-1989 color corrected.png|450px|thumb|left|Inflation and crude oil price, 1969–1989 (pre-Reagan years highlighted in yellow)]]
Prior to the Reagan administration, the United States economy experienced a decade of high unemployment and persistently high inflation (known as [[stagflation]]). Attacks on Keynesian economic orthodoxy as well as empirical economic models such as the [[Phillips Curve]] grew. Political pressure favored stimulus resulting in an expansion of the money supply. President [[Richard Nixon]]'s [[Wage and price controls#United States|wage and price controls]] were phased out.<ref name="greenspan">{{cite book |first=Alan |last=Greenspan |author-link=Alan Greenspan |title=The Age of Turbulence |url=https://archive.org/details/isbn_9780143114161 |url-access=registration |publisher=Penguin Press |year=2007 }}</ref> The [[Strategic Petroleum Reserve (United States)|federal oil reserves]] were created to ease any future short term shocks. President [[Jimmy Carter]] had begun phasing out price controls on petroleum while he created the Department of Energy. Much of the credit for the resolution of the stagflation is given to two causes: renewed focus on increasing productivity<ref>{{Cite journal |last=Porter |first=Roger B. |date=1983 |title=Perspectives on Productivity: America's Productivity Challenge in the 1980s |url=https://www.jstor.org/stable/3380361 |journal=Public Productivity Review |volume=7 |issue=1 |pages=68–81 |doi=10.2307/3380361 |jstor=3380361 |issn=0361-6681|url-access=subscription }}</ref> and a three-year contraction of the money supply by the [[Federal Reserve Board]] under [[Paul Volcker]].<ref>{{Cite book |url=https://link.springer.com/book/10.1057/9781137283665 |title=Margaret Thatcher and Ronald Reagan |year=2012 |language=en |doi=10.1057/9781137283665|last1=Cooper |first1=James |isbn=978-1-349-33847-4 }}</ref>

In stating that his intention was to lower taxes, Reagan's approach was a departure from his immediate predecessors. Reagan enacted lower marginal tax rates as well as simplified income tax codes and continued [[deregulation]]. During Reagan's eight year presidency, the annual deficits averaged 4.0% of GDP, compared to a 2.2% average during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=k9KW|title=Federal Surplus or Deficit [-] as Percent of Gross Domestic Product|date=March 28, 2018|access-date=June 13, 2018|archive-date=June 13, 2018|archive-url=https://web.archive.org/web/20180613040701/https://fred.stlouisfed.org/graph/?g=k9KW|url-status=live}}</ref> The real (inflation adjusted) average rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan.<ref name="auto">"The Fortune Encyclopedia of Economics" edited by: David R. Henderson, http://lf-oll.s3.amazonaws.com/titles/1064/0145_Bk.pdf {{Webarchive|url=https://web.archive.org/web/20190412055323/http://lf-oll.s3.amazonaws.com/titles/1064/0145_Bk.pdf |date=April 12, 2019 }} (p.290)</ref><ref>{{cite web|url=https://trumpwhitehouse.archives.gov/omb/historical-tables/|title=Table 1.3—Summary of Receipts, Outlays, and Surpluses or Deficits (-) in Current Dollars, Constant (FY 2009) Dollars, and as Percentages of GDP: 1940–2023|date=June 14, 2018|access-date=June 14, 2018|archive-date=June 6, 2021|archive-url=https://web.archive.org/web/20210606114308/https://www.whitehouse.gov/omb/historical-tables/|url-status=live}}</ref> GDP per employed person increased at an average 1.5% rate during the Reagan administration, compared to an average 0.6% during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/series/USARGDPE|title=Real GDP per Employed Person in the United States (DISCONTINUED)|date=December 10, 2012|access-date=June 13, 2018|archive-date=June 13, 2018|archive-url=https://web.archive.org/web/20180613062512/https://fred.stlouisfed.org/series/USARGDPE|url-status=live}}</ref> Private sector productivity growth, measured as real output per hour of all persons, increased at an average rate of 1.9% during Reagan's eight years, compared to an average 1.3% during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=k9Lt|title=Business Sector: Real Output Per Hour of All Persons|date=June 6, 2018|access-date=June 13, 2018|archive-date=June 13, 2018|archive-url=https://web.archive.org/web/20180613062532/https://fred.stlouisfed.org/graph/?g=k9Lt|url-status=live}}</ref> Federal net outlays as a percent of GDP averaged 20.27% under Reagan (01/20/1981 - 01/20/1989), compared to 21.14% during the preceding eight (01/20/1973 - 1/20/1981) years.<ref name="FRED">{{cite web |url=https://fred.stlouisfed.org/series/FYONGDA188S |title=Federal Net Outlays as Percent of GDP for United States |date=January 1929 |access-date=April 1, 2017 |archive-date=July 3, 2018 |archive-url=https://web.archive.org/web/20180703071538/https://fred.stlouisfed.org/series/FYONGDA188S |url-status=live }}</ref>

During the Nixon and Ford Administrations, before Reagan's election, a combined supply and demand side policy was considered unconventional by the [[Factions in the Republican Party (United States)#Moderates|moderate wing of the Republican Party]]. While running against Reagan for the Presidential nomination in 1980, [[George H. W. Bush]] had derided Reaganomics as "voodoo economics".<ref name="Voodoo_economics-2004">{{cite news |url=http://news.bbc.co.uk/1/hi/world/americas/270292.stm |title=Reagonomics or 'voodoo economics'? |work=BBC News |date=June 5, 2004 |access-date=January 4, 2012 |archive-date=August 29, 2017 |archive-url=https://web.archive.org/web/20170829072015/http://news.bbc.co.uk/1/hi/world/americas/270292.stm |url-status=live }}</ref> Similarly, in 1976, [[Gerald Ford]] had severely criticized Reagan's proposal to turn back a large part of the Federal budget to the states.

==Justifications==
{{More citations needed section|date=April 2021}}
In his [[Ronald Reagan presidential campaign, 1980|1980 campaign]] speeches, Reagan presented his economic proposals as a return to the [[free enterprise]] principles, [[free market economy]] that had been in favor before the [[Great Depression]] and FDR's [[New Deal]] policies. At the same time he attracted a following from the [[supply-side economics]] movement, which formed in opposition to [[Keynesian]] demand-stimulus economics. This movement produced some of the strongest supporters for Reagan's policies during his term in office.

The contention of the proponents, that the tax rate cuts would more than cover any increases in federal debt, was influenced by a theoretical taxation model based on the elasticity of tax rates, known as the [[Laffer curve]]. [[Arthur Laffer]]'s model predicts that excessive tax rates actually reduce potential tax revenues, by lowering the incentive to produce; the model also predicts that insufficient tax rates (rates below the optimum level for a given economy) lead directly to a reduction in tax revenues.

Ronald Reagan also cited the 14th-century Arab scholar [[Ibn Khaldun]] as an influence on his supply-side economic policies, in 1981. Reagan paraphrased Ibn Khaldun, who said that "In the beginning of the dynasty, great tax revenues were gained from small assessments," and that "at the end of the dynasty, small tax revenues were gained from large assessments." Reagan said his goal is "trying to get down to the small assessments and the great revenues."<ref>{{cite news |last1=McFadden |first1=Robert D. |title=Reagan Cites Islamic Scholar |url=https://www.nytimes.com/1981/10/02/us/reagan-cites-islamic-scholar.html |work=[[The New York Times]] |date=October 2, 1981 |access-date=July 1, 2019 |archive-date=July 1, 2019 |archive-url=https://web.archive.org/web/20190701153346/https://www.nytimes.com/1981/10/02/us/reagan-cites-islamic-scholar.html |url-status=live }}</ref>

==Policies==
Reagan lifted remaining domestic petroleum price and allocation controls on January 28, 1981,<ref>{{cite web |title=Executive Order 12287 – Decontrol of Crude Oil and Refined Petroleum Products |date=January 28, 1981 |url=http://www.reagan.utexas.edu/archives/speeches/1981/12881a.htm |access-date=January 27, 2008 |archive-date=September 24, 2015 |archive-url=https://web.archive.org/web/20150924085226/http://www.reagan.utexas.edu/archives/speeches/1981/12881a.htm |url-status=dead }}</ref> and lowered the oil [[windfall profits tax]] in August 1981. He ended the oil windfall profits tax in 1988.<ref>{{cite web|url=http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/edf8de04e58e4b14852570ba0048848b|title=Historical Perspective: The Windfall Profit Tax|date=November 10, 2005|author=Joseph J. Thorndike|access-date=August 14, 2013|archive-date=December 16, 2017|archive-url=https://web.archive.org/web/20171216061348/http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/edf8de04e58e4b14852570ba0048848b|url-status=dead}}</ref> During the first year of Reagan's presidency, federal [[income tax in the United States|income tax rates]] were lowered significantly with the signing of the [[Economic Recovery Tax Act of 1981]],<ref>{{cite web|last=Mitchell|first=Daniel J.|url=http://www.heritage.org/Research/Taxes/BG1086.cfm|title=The Historical Lessons of Lower Tax Rates|publisher=The Heritage Foundation|date=July 19, 1996|access-date=May 22, 2007|url-status=unfit|archive-url=https://web.archive.org/web/20070530071923/http://www.heritage.org/Research/Taxes/BG1086.cfm|archive-date=May 30, 2007}}</ref> which lowered the top marginal tax bracket from 70% to 50% and the lowest bracket from 14% to 11%. This act slashed [[Estate tax in the United States|estate taxes]] and trimmed taxes paid by business corporations by $150 billion over a five-year period. In 1982 Reagan agreed to a rollback of corporate tax cuts and a smaller rollback of individual income tax cuts. The [[Tax Equity and Fiscal Responsibility Act of 1982|1982 tax increase]] undid a third of the initial tax cut. In 1983 Reagan instituted a payroll tax increase on Social Security and Medicare hospital insurance.<ref name=KrugmanGreatTaxer>{{cite news |title=The Great Taxer |author=Paul Krugman |url=https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |newspaper=The New York Times |date=June 8, 2004 |access-date=August 30, 2011 |archive-date=December 20, 2022 |archive-url=https://web.archive.org/web/20221220114428/https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |url-status=live }}</ref> In 1984 another bill was introduced that closed tax loopholes. According to tax historian Joseph Thorndike, the bills of 1982 and 1984 "constituted the biggest tax increase ever enacted during peacetime".<ref>{{cite web | title=Taxes: What people forget about Reagan | url=https://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/ | access-date=August 3, 2020 | archive-date=December 22, 2017 | archive-url=https://web.archive.org/web/20171222225240/http://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/ | url-status=live }}</ref>

With the [[Tax Reform Act of 1986]], Reagan and Congress sought to simplify the tax system by eliminating many deductions, reducing the highest marginal rates, and reducing the number of tax brackets.<ref>{{cite book|last1=Brownlee|first1=Elliot|last2=Graham|first2=Hugh Davis|title=The Reagan Presidency: Pragmatic Conservatism & Its Legacies|date=2003|publisher=University of Kansas Press|location=Lawrence, Kansas|pages=172–173}}</ref><ref>{{cite book|last1=Steuerle|first1=C. Eugene|title=The Tax Decade: How Taxes Came to Dominate the Public Agenda|date=1992|publisher=The Urban Institute Press|location=Washington D.C.|isbn=0-87766-523-0|page=[https://archive.org/details/taxdecadehowtaxe0000steu/page/122 122]|url=https://archive.org/details/taxdecadehowtaxe0000steu/page/122}}</ref><ref>{{cite web |url=http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets |title=U.S. Federal Individual Income Tax Rates History, 1913–2011 (Nominal and Inflation-Adjusted Brackets) |date=September 9, 2011 |publisher=Tax Foundation |access-date=August 12, 2012 |url-status=dead |archive-url=https://web.archive.org/web/20130116210911/http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets |archive-date=January 16, 2013 }}</ref><ref>{{cite magazine | url=https://business.time.com/2011/12/01/the-tragic-death-of-the-temporary-tax-cut/ | magazine=Time | title=The Tragic Death of the Temporary Tax Cut | date=October 1, 2011 | access-date=December 1, 2011 | archive-date=July 1, 2012 | archive-url=https://web.archive.org/web/20120701143042/http://moneyland.time.com/2011/12/01/the-tragic-death-of-the-temporary-tax-cut/ | url-status=live }}</ref> In 1983, Democrats [[Bill Bradley]] and [[Dick Gephardt]] had offered a proposal; in 1984 Reagan had the Treasury Department produce its own plan. The 1986 act aimed to be revenue-neutral: while it reduced the top marginal rate, it also cleaned up the tax base by removing certain tax write-offs, preferences, and exceptions, thus raising the effective tax on activities previously specially favored by the code. 
[[File:President Ronald Reagan meets with the Press after signing the 1981 Tax Reconciliation Bill Rancho Del Cielo.jpg|thumb|left|President [[Ronald Reagan]] signs the [[Economic Recovery Tax Act of 1981]] at his California ranch.]]

Federal revenue share of GDP fell from 19.6% in fiscal 1981 to 17.3% in 1984, before rising back to 18.4% by fiscal year 1989. Personal income tax revenues fell during this period relative to GDP, while payroll tax revenues rose relative to GDP.<ref name="CBO Historical Tables">{{cite web |url=http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables%5B1%5D.pdf |title=CBO Historical Tables |access-date=January 4, 2012 |archive-date=January 12, 2012 |archive-url=https://web.archive.org/web/20120112075024/http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables&#91;1&#93;.pdf |url-status=dead }}</ref>  Reagan's 1981 cut in the top regular tax rate on [[unearned income]] reduced the maximum capital gains rate to only {{nowrap|20%{{tsp}}{{mdash}}{{tsp}}}}its lowest level since the Hoover administration ({{nowrap|1929{{hsp}}{{ndash}}}}1933).<ref>{{cite news | url=http://www.ctj.org/hid_ent/part-2/part2-2.htm | publisher=Citizens for Tax Justice | title=The Hidden Entitlements: Capital Gains | access-date=August 15, 2012 | url-status=dead | archive-url=https://web.archive.org/web/20120418112133/http://www.ctj.org/hid_ent/part-2/part2-2.htm | archive-date=April 18, 2012 }}</ref> The 1986 act set tax rates on capital gains at the same level as the rates on ordinary income like salaries and wages, with both topping out at 28%.<ref>{{cite news | url=https://www.nytimes.com/2012/01/18/us/politics/for-wealthy-tax-cuts-since-1980s-have-been-gain-gain.html?_r=1 | work=The New York Times | title=Since 1980s, the Kindest of Tax Cuts for the Rich | date=January 18, 2012 | access-date=January 21, 2012 | first1=David | last1=Kocieniewski | archive-date=March 25, 2012 | archive-url=https://web.archive.org/web/20120325130257/http://www.nytimes.com/2012/01/18/us/politics/for-wealthy-tax-cuts-since-1980s-have-been-gain-gain.html?_r=1 | url-status=live }}</ref>

Reagan significantly increased public expenditures, primarily the Department of Defense, which rose (in constant 2000 dollars) from $267.1 billion in 1980 (4.9% of GDP and 22.7% of public expenditure) to $393.1 billion in 1988 (5.8% of GDP and 27.3% of public expenditure); most of those years military spending was about 6% of GDP, exceeding this number in 4 different years. All these numbers had not been seen since the end of U.S. involvement in the [[Vietnam War]] in 1973.<ref>[https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf Historical tables, Budget of the United States Government] {{webarchive|url=https://web.archive.org/web/20120417053737/http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf |date=April 17, 2012}}, 2013, table 6.1.</ref> In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%.<ref>{{cite web | url=http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf | title=Effective Federal Tax Rates: 1979–2001 | publisher=Bureau of Economic Analysis | date=July 10, 2007 | access-date=April 30, 2013 | archive-date=April 15, 2013 | archive-url=https://web.archive.org/web/20130415120346/https://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf | url-status=live }}</ref> The federal deficit under Reagan peaked at 6% of GDP in 1983, falling to 3.2% of GDP in 1987<ref name="Fisc">{{cite news |title=The Democratic Fisc |url=https://www.wsj.com/articles/SB10001424052748703995104575389430430274968 |newspaper=The Wall Street Journal |date=July 25, 2012 |access-date=March 22, 2011}}</ref> and to 3.1% of GDP in his final budget.<ref name="DefGDP">{{Cite web|url=https://www.multpl.com/u-s-federal-deficit-percent/table/by-year|title=US Federal Deficit as Percentage of GDP by Year|website=www.multpl.com|access-date=October 18, 2022|archive-date=October 18, 2022|archive-url=https://web.archive.org/web/20221018191652/https://www.multpl.com/u-s-federal-deficit-percent/table/by-year|url-status=live}}</ref> The inflation-adjusted rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan. This was the slowest rate of growth in inflation adjusted spending since Eisenhower. However, federal deficit as percent of GDP was up throughout the Reagan presidency from 2.7% at the end of (and throughout) the Carter administration.<ref name="auto"/><ref name="DefGDP"/><ref>{{cite web|url=https://www.cato.org/blog/presidential-spending-0|title=Presidential Spending|access-date=June 25, 2018|date=February 19, 2016|archive-date=June 25, 2018|archive-url=https://web.archive.org/web/20180625213321/https://www.cato.org/blog/presidential-spending-0|url-status=live}}</ref> As a short-run strategy to reduce inflation and lower nominal interest rates, the U.S. borrowed both domestically and abroad to cover the Federal budget deficits, raising the [[national debt]] from $997 billion to $2.85 trillion.<ref name="Historical Debt Outstanding">{{cite web |url=http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm |title=Historical Debt Outstanding |publisher=U.S. Treasury Department |access-date=September 8, 2010 |archive-date=February 6, 2012 |archive-url=https://web.archive.org/web/20120206164959/http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm |url-status=dead }}</ref> This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation.<ref name="U.S. Debt">{{Cite news |url=https://www.washingtonpost.com/wp-dyn/articles/A26402-2004Jun8.html |title=Reagan Policies Gave Green Light to Red Ink |access-date=May 25, 2007 |newspaper=The Washington Post |date=June 9, 2004 |archive-date=June 14, 2018 |archive-url=https://web.archive.org/web/20180614121249/http://www.washingtonpost.com/wp-dyn/articles/A26402-2004Jun8.html |url-status=live }}</ref> Reagan described the new debt as the "greatest disappointment" of his presidency.<ref name="Cannon128">Cannon, Lou (2001) p. 128</ref>

According to [[William A. Niskanen]], one of the architects of Reaganomics, "Reagan delivered on each of his four major policy objectives, although not to the extent that he and his supporters had hoped", and notes that the most substantial change was in the tax code, where the top marginal individual income tax rate fell from 70.1% to 28.4%, and there was a "major reversal in the tax treatment of business income", with effect of "reducing the tax bias among types of investment but increasing the average effective tax rate on new investment". [[Roger B. Porter|Roger Porter]], another architect of the program, acknowledges that the program was weakened by the many hands that changed the President's calculus, such as Congress.<ref name="nisk_concise" /><ref>Niskanen continues: "It is not clear whether this measure [reduce bias, increase effective tax rate on new investment] was a net improvement in the tax code."</ref>

==Results==
{{originalresearch-section|date=March 2023}} 
===Overview===
[[File:Annual percent change in real GDP 1973-1988.png|450px|thumb|right|Annual percent change in real gross domestic product — 1972 through 1988 (Reagan years in red)]]

Spending during the years Reagan budgeted (FY 1982–89) averaged 21.6% GDP, roughly tied with president Obama, but lagging behind President Trump's 38.2%,<ref>{{Cite web |date=2025-01-15 |title=National Accounts: GDP by Expenditure: Constant Prices: Gross Domestic Product: Total for United States |url=https://fred.stlouisfed.org/series/USAGDPRQPSMEI |access-date=2025-01-22 |website=fred.stlouisfed.org |language=en}}</ref> though much of that was due to the Covid-19 pandemic. Both Obama and Reagan faced a severe recession early in their administration. In addition, the [[public debt]] rose from 26% GDP in 1980 to 41% GDP by 1988. In dollar terms, the public debt rose from $712 billion in 1980 to $2.052 trillion in 1988, a roughly three-fold increase.<ref name="CBO Historical Tables"/>{{RP|143}}  The unemployment rate fell from 7% in 1980, to 5% in 1988. The inflation rate declined from 10% in 1980 to 4% in 1988.<ref name="nisk_concise"/>

Some economists have stated that Reagan's policies were an important part of bringing about the third longest peacetime economic expansion in U.S. history.<ref name=nationalreview>{{cite news |title=Debt, Lies, and Inflation |author=Paul Craig Roberts |url=http://old.nationalreview.com/reagan/roberts200406101413.asp |newspaper=National Review |date=August 31, 1992 |access-date=February 27, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20110424073621/http://old.nationalreview.com/reagan/roberts200406101413.asp |archive-date=April 24, 2011 |author-link=Paul Craig Roberts }}</ref><ref name="Gardner">{{cite journal |last1=Gardner |first1=Jennifer M. |year=1994 |title=The 1990–1991 Recession: How Bad was the Labor Market? |journal=Monthly Labor Review |volume=117 |issue=6 |pages=3–11 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |url=http://www.bls.gov/opub/mlr/1994/06/art1full.pdf |access-date=April 6, 2011 |archive-date=October 21, 2011 |archive-url=https://web.archive.org/web/20111021172340/http://bls.gov/opub/mlr/1994/06/art1full.pdf |url-status=live }}</ref> <!-- Though other economists argue the longer 1990s expansion begun under [[George H.W. Bush]] in 1991 occurred after an [[George H. W. Bush#Economy|increase in tax rates]] by Congress in November 1990, continuing through the Clinton administration, resulting in a 4.2% decrease in unemployment.<ref name="U.S. Department of Labor: Bureau of Labor Statistics via The Federal Reserve Bank of St. Louis">{{cite web |url=http://research.stlouisfed.org/fred2/data/UNRATE.txt |title=Civilian Unemployment Rate |date=August 3, 2012 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012}}</ref>  CLARIFICATION NEEDED: How are these numbers being calculated? E.g. looking at the reference, we see monthly unemployment numbers. From what date to what date is the 4.2%/42% decrease being calculated. --> During the Reagan administration, real GDP growth averaged 3.5%, compared to 2.9% during the preceding eight years.<ref>{{cite web |url=https://www.bea.gov/national/xls/gdpchg.xls |title=Gross Domestic Product |date=July 27, 2012 |publisher=Bureau of Economic Analysis |format=Microsoft Excel spreadsheet |access-date=August 15, 2012 |archive-date=August 14, 2018 |archive-url=https://web.archive.org/web/20180814045606/https://www.bea.gov/national/xls/gdpchg.xls |url-status=dead }}</ref>{{additional citations needed|date=April 2025}} The annual average unemployment rate declined by 1.7 percentage points, from 7.2% in 1980 to 5.5% in 1988, after it had increased by 1.6 percentage points over the preceding eight years.<ref name="U.S. Department of Labor: Bureau of Labor Statistics via The Federal Reserve Bank of St. Louis">{{cite web |url=http://research.stlouisfed.org/fred2/data/UNRATE.txt |title=Civilian Unemployment Rate |date=August 3, 2012 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012 |archive-date=September 2, 2011 |archive-url=https://web.archive.org/web/20110902151143/http://research.stlouisfed.org/fred2/data/UNRATE.txt |url-status=live }}</ref><ref>{{cite web |url=http://www.bls.gov/cps/cpsaat01.htm |title=Labor Force Statistics from the Current Population Survey: Employment status of the civilian noninstitutional population, 1941 to date |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012 |archive-date=August 21, 2012 |archive-url=https://web.archive.org/web/20120821061545/http://www.bls.gov/cps/cpsaat01.htm |url-status=live }}</ref>  Nonfarm employment increased by 16.1 million during Reagan's presidency, compared to 15.4 million during the preceding eight years,<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=k9tV|title=All Employees: Total Nonfarm Payrolls|date=June 1, 2018|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612210716/https://fred.stlouisfed.org/graph/?g=k9tV|url-status=live}}</ref> while manufacturing employment declined by 582,000 after rising 363,000 during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/series/MANEMP|title=All Employees: Manufacturing|date=June 1, 2018|access-date=June 13, 2018|archive-date=March 14, 2021|archive-url=https://web.archive.org/web/20210314155456/https://fred.stlouisfed.org/series/MANEMP|url-status=live}}</ref> Reagan's administration is the only one not to have raised the minimum wage.<ref>{{cite web |url=https://www.dol.gov/agencies/whd/minimum-wage/history/chart |title=History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938–2009 |publisher=United States Department of Labor: Wage and Hour Division (WHD) |access-date=December 27, 2009 |archive-date=November 21, 2019 |archive-url=https://web.archive.org/web/20191121102637/http://www.dol.gov/whd/minwage/chart.htm |url-status=live }}</ref>  The inflation rate, 13.5% in 1980, fell to 4.1% in 1988, in part because the [[Federal Reserve]] increased interest rates (prime rate peaking at 20.5% in August 1981<ref>{{cite web |url=https://fred.stlouisfed.org/series/MPRIME|title=Bank Prime Loan Rate|date=June 1, 2018|access-date=June 13, 2018}}</ref>).<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=ipl2|title=Consumer Price Index for All Urban Consumers: All Items|date=June 12, 2018|access-date=June 13, 2018|archive-date=August 5, 2020|archive-url=https://web.archive.org/web/20200805050150/https://fred.stlouisfed.org/graph/?g=ipl2|url-status=live}}</ref><ref>{{Cite web|url=https://www.federalreservehistory.org/essays/great-inflation|title=The Great Inflation &#124; Federal Reserve History|website=www.federalreservehistory.org|access-date=October 18, 2022|archive-date=October 18, 2022|archive-url=https://web.archive.org/web/20221018191653/https://www.federalreservehistory.org/essays/great-inflation|url-status=live}}</ref>  The latter contributed to a recession from July 1981 to November 1982 during which unemployment rose to 9.7% and GDP fell by 1.9%. Additionally, income growth slowed for middle- and lower-class (2.4% to 1.8%) and rose for the upper-class (2.2% to 4.83%).<ref>{{cite web|url=http://www.taxhistory.org/www/features.nsf/Articles/2BEBD14445F182F1852579F10058AA9F?OpenDocument|title=Tax Analysts -- Reaganomics -- A Report Card|website=www.taxhistory.org|access-date=June 12, 2018|archive-date=March 17, 2018|archive-url=https://web.archive.org/web/20180317102840/http://www.taxhistory.org/www/features.nsf/Articles/2BEBD14445F182F1852579F10058AA9F?OpenDocument|url-status=live}}</ref>

The [[misery index (economics)|misery index]], defined as the [[inflation rate]] added to the [[unemployment rate]], shrank from 19.33 when he began his administration to 9.72 when he left, the greatest improvement record for a President since [[Harry S. Truman]] left office.<ref>{{cite web|url=http://www.miseryindex.us/indexbyPresident.aspx|title=US Misery Index - Index by President|website=www.miseryindex.us|access-date=June 12, 2018|archive-date=February 14, 2015|archive-url=https://web.archive.org/web/20150214232054/http://miseryindex.us/indexbyPresident.aspx|url-status=live}}</ref> In terms of American households, the percentage of total households making less than $10,000 a year (in real 2007 dollars) shrank from 8.8% in 1980 to 8.3% in 1988 while the percentage of households making over $75,000 went from 20.2% to 25.7% during that period, both signs of progress.<ref>"Income, Poverty, and Health Insurance Coverage in the United States: 2007" by the Census Bureau, https://www.census.gov/prod/2008pubs/p60-235.pdf {{Webarchive|url=https://web.archive.org/web/20210126133037/https://www.census.gov/prod/2008pubs/p60-235.pdf |date=January 26, 2021 }} (Table A-1 on p. 27)</ref>

===Employment===
[[File:1981–1989 monthly unemployment, inflation, and interest rates.svg|thumb|upright=1.3|alt=Line charts showing Bureau of Labor Statistics and Federal Reserve Economic Data information on the monthly unemployment, inflation, and interest rates from January 1981 to January 1989|Monthly unemployment, inflation, and interest rates from January 1981 to January 1989, according to the [[Bureau of Labor Statistics]] and [[Federal Reserve Economic Data]]]]

The job growth (measured for non-farm payrolls) under the Reagan administration averaged 168,000 per month, versus 216,000 for Carter, 55,000 for H.W. Bush, and 239,000 for Clinton. The annual job growth percentages (comparing the beginning and ending number of jobs during their time in office to determine an annual [[Compound annual growth rate|growth rate]]) show that jobs grew by 2.0% annually under Reagan, versus 3.1% under Carter, 0.6% under H.W. Bush, and 2.4% under Clinton.<ref>{{cite web |url=https://fred.stlouisfed.org/series/PAYEMS|title=All Employees: Total Nonfarm Payrolls|date=June 1, 2018|access-date=June 12, 2018|archive-date=August 18, 2021|archive-url=https://web.archive.org/web/20210818204529/https://fred.stlouisfed.org/series/PAYEMS|url-status=live}}</ref>

The unemployment rate averaged 7.5% under Reagan, compared to an average 6.6% during the preceding eight years. Declining steadily after December 1982, the rate was 5.4% the month Reagan left office.<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=kbeQ|title=Civilian Unemployment Rate|date=June 1, 2018|access-date=June 15, 2018|archive-date=June 16, 2018|archive-url=https://web.archive.org/web/20180616001858/https://fred.stlouisfed.org/graph/?g=kbeQ|url-status=live}}</ref>

The labor force participation rate increased by 2.6 percentage points during Reagan's eight years, compared to 3.9 percentage points during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=kbkw|title=Civilian Labor Force Participation Rate|date=June 1, 2018|access-date=June 15, 2018|archive-date=June 16, 2018|archive-url=https://web.archive.org/web/20180616030151/https://fred.stlouisfed.org/graph/?g=kbkw|url-status=live}}</ref>

===Growth rates===
Following the 1981 recession, the unemployment rate had averaged slightly higher (6.75% vs. 6.35%), productivity growth lower (1.38% vs. 1.92%), and private investment as a percentage of GDP slightly less (16.08% vs. 16.86%).{{citation needed|date=June 2018}} In the 1980s, industrial productivity growth in the United States matched that of its trading partners after trailing them in the 1970s. By 1990, manufacturing's share of GNP exceeded the post-World War II low hit in 1982 and matched "the level of output achieved in the 1960s when American factories hummed at a feverish clip".<ref>{{cite news | url=https://www.nytimes.com/1991/02/05/business/american-revival-in-manufacturing-seen-in-us-report.html | work=[[The New York Times]] | title=AMERICAN REVIVAL IN MANUFACTURING SEEN IN U.S. REPORT | date=February 5, 1991 | access-date=June 14, 2018 | archive-date=June 15, 2018 | archive-url=https://web.archive.org/web/20180615033947/https://www.nytimes.com/1991/02/05/business/american-revival-in-manufacturing-seen-in-us-report.html | url-status=live }}</ref>

===GDP growth===
Real GDP grew over one-third during Reagan's presidency, an over $2 trillion increase. The compound annual growth rate of GDP was 3.6% during Reagan's eight years, compared to 2.7% during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=k9Ev|title=Real Gross Domestic Product|date=May 30, 2018|access-date=June 12, 2018|archive-date=June 13, 2018|archive-url=https://web.archive.org/web/20180613015101/https://fred.stlouisfed.org/graph/?g=k9Ev|url-status=live}}</ref> Real GDP per capita grew 2.6% under Reagan, compared to 1.9% average growth during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=k9v7|title=Real gross domestic product per capita|date=May 30, 2018|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612211204/https://fred.stlouisfed.org/graph/?g=k9v7|url-status=live}}</ref>

=== Real wages ===
[[File:Real working class wage in 2017 dollars, 1972-1989.png|454x454px|thumb|right|Under Reagan, real working-class wages continued the declining trend that began in 1973, albeit at a slower rate]]The average real hourly wage for production and nonsupervisory workers continued the decline that had begun in 1973, albeit at a slower rate, and remained below the pre-Reagan level in every Reagan year.<ref>{{Cite web|url=https://www.bls.gov/opub/mlr/2005/05/art1full.pdf|title=Real compensation, 1979 to 2003: analysis from several data sources}}</ref> While inflation remained elevated during his presidency and likely contributed to the decline in wages over this period, Reagan's critics often argue that his neoliberal policies were responsible for this and also led to a stagnation of wages in the next few decades.

===Income and wealth===
In nominal terms, median household income grew at a [[compound annual growth rate]] (CAGR) of 5.5% during the Reagan presidency, compared to 8.5% during the preceding five years (pre-1975 data are unavailable).<ref>{{cite web|url=https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html|title=Historical Income Tables: Households|website=www.census.gov|access-date=June 13, 2018|archive-date=July 13, 2017|archive-url=https://web.archive.org/web/20170713092443/https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html|url-status=live}}</ref> Real median family income grew by $4,492 during the Reagan period, compared to a $1,270 increase during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=k9vM|title=Real Median Family Income in the United States|date=September 13, 2017|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612211154/https://fred.stlouisfed.org/graph/?g=k9vM|url-status=live}}</ref> After declining from 1973 through 1980, real mean personal income rose $4,708 by 1988.<ref>{{cite web|url=https://fred.stlouisfed.org/series/MAPAINUSA672N|title=Real Mean Personal Income in the United States|date=September 13, 2017|access-date=June 13, 2018|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614044619/https://fred.stlouisfed.org/series/MAPAINUSA672N|url-status=live}}</ref> Nominal household net worth increased by a CAGR of 8.4%, compared to 9.3% during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/series/HNONWRA027N|title=Households and nonprofit organizations; net worth, Level|date=June 7, 2018|access-date=June 13, 2018|archive-date=March 11, 2018|archive-url=https://web.archive.org/web/20180311020446/https://fred.stlouisfed.org/series/HNONWRA027N|url-status=live}}</ref>

===Poverty level===
The percentage of the total population below the poverty level increased from 13.0% in 1980 to 15.2% in 1983, then declined back to 13.0% in 1988.<ref>{{cite web|url=https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-poverty-people/?sec_ak_reference=18.577f1cb8.1513195579.2f88|title=Index of /programs-surveys/cps/tables/time-series/historical-poverty-people|website=www2.census.gov|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612143043/https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-poverty-people/?sec_ak_reference=18.577f1cb8.1513195579.2f88|url-status=live}}</ref> During Reagan's first term, critics noted [[Homelessness in the United States|homelessness]] as a visible problem in U.S. urban centers.<ref>{{Cite news|url=https://www.washingtonpost.com/archive/politics/1984/07/29/reagan-welfare-cuts-found-to-worsen-families-poverty/077278f9-a875-4791-9c34-d1cf3cd148b5/|title=Reagan Welfare Cuts Found To Worsen Families' Poverty|newspaper=[[The Washington Post]]|access-date=March 10, 2024|archive-date=December 9, 2022|archive-url=https://web.archive.org/web/20221209165011/https://www.washingtonpost.com/archive/politics/1984/07/29/reagan-welfare-cuts-found-to-worsen-families-poverty/077278f9-a875-4791-9c34-d1cf3cd148b5/|url-status=live}}</ref><ref>{{cite web |url=http://www.nhi.org/online/issues/135/reagan.html |archive-url=https://web.archive.org/web/20041027055709/http://www.nhi.org/online/issues/135/reagan.html |url-status=dead |archive-date=October 27, 2004 |title=Reagan's Legacy: Homelessness in America |author=Peter Dreier |year=2004 |publisher=National Housing Institute |access-date=April 29, 2011 }}</ref> According to [[Don Mitchell (geographer)|Don Mitchell]], the increased cuts to spending on housing and social services under Reagan was a contributing factor to the homeless population nearly doubling in just three years, from 1984 to 1987.<ref>{{cite news|last=Kirk|first=Mimi|date=May 13, 2020|title=How the Streets Got So Mean|url=https://www.bloomberg.com/news/articles/2020-05-13/what-causes-homelessness-start-with-capitalism|work=Bloomberg|location=|access-date=July 14, 2023|archive-date=April 15, 2023|archive-url=https://web.archive.org/web/20230415194420/https://www.bloomberg.com/news/articles/2020-05-13/what-causes-homelessness-start-with-capitalism|url-status=live}}</ref><ref>{{cite book|last=Mitchell|first=Don|author-link=Don Mitchell (geographer)|date=2020|title=Mean Streets: Homelessness, Public Space, and the Limits of Capital|url=https://ugapress.org/book/9780820356907/mean-streets/|location=|publisher=[[University of Georgia Press]]|page=62|isbn=9-780-8203-5690-7|access-date=July 14, 2023|archive-date=July 13, 2023|archive-url=https://web.archive.org/web/20230713191327/https://ugapress.org/book/9780820356907/mean-streets/|url-status=live}}</ref> In the closing weeks of his presidency, Reagan told [[David Brinkley]] that the homeless "make it their own choice for staying out there," noting his belief that there "are shelters in virtually every city, and shelters here, and those people still prefer out there on the grates or the lawn to going into one of those shelters". He also stated that "a large proportion" of them are "mentally impaired", which he believed to be a result of lawsuits by the [[ACLU]] (and similar organizations) against mental institutions.<ref name="New York Times">{{cite news |title=Reagan on Homelessness: Many Choose to Live in the Streets |author=Steven V. Roberts |url=https://www.nytimes.com/1988/12/23/us/reagan-on-homelessness-many-choose-to-live-in-the-streets.html |newspaper=The New York Times |date=December 23, 1988 |access-date=January 4, 2012 |archive-date=January 26, 2018 |archive-url=https://web.archive.org/web/20180126185038/http://www.nytimes.com/1988/12/23/us/reagan-on-homelessness-many-choose-to-live-in-the-streets.html |url-status=live }}</ref>

===Federal income tax and payroll tax levels===
{{Main|History of taxation in the United States}}
During the Reagan administration, fiscal year federal receipts grew from $599 billion to $991 billion (an increase of 65%) while fiscal year federal outlays grew from $678 billion to $1144 billion (an increase of 69%).<ref>{{cite web |url= http://www.presidency.ucsb.edu/data/budget.php |title= Federal Budget Receipts and Outlays |publisher= Presidency.ucsb.edu |access-date= January 4, 2012 |archive-date= May 25, 2010 |archive-url= https://web.archive.org/web/20100525112710/http://www.presidency.ucsb.edu/data/budget.php |url-status= live }}</ref><ref>{{cite web |url= http://www.socialsecurity.gov/history/pdf/4a.pdf |title= Table 4.A1 – Old-Age and Survivors Insurance, selected years 1937–2007 (in millions of dollars) |publisher= U.S. Social Security Administration |access-date= August 12, 2012 |archive-date= May 1, 2011 |archive-url= https://web.archive.org/web/20110501213059/http://www.socialsecurity.gov/history/pdf/4a.pdf |url-status= live }}</ref> According to a 1996 report of the Joint Economic Committee of the United States Congress, during Reagan's two terms, and through 1993, the top 10% of taxpayers paid an increased share of income taxes (not including payroll taxes) to the Federal government, while the lowest 50% of taxpayers paid a reduced share of income tax revenue.<ref name="JEC">{{cite web |url= http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm |title=The Reagan Tax Cuts: Lessons for Tax Reform |author=Christopher Frenze |date=April 1996 |publisher= U.S. Congress, Joint Economic Committee |access-date=March 22, 2011 |archive-date=February 26, 2009 |archive-url= https://web.archive.org/web/20090226201115/http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm}}</ref> Personal income tax revenues declined from 9.4% GDP in 1981 to 8.3% GDP in 1989, while payroll tax revenues increased from 6.0% GDP to 6.7% GDP during the same period.<ref name="CBO Historical Tables"/>

===Tax receipts===
[[File:CBO 1981 forecast of impact of Reagan tax cuts vs baseline.png|thumb|right|350px|Both the Reagan Administration and CBO forecast that the Reagan tax cuts would reduce revenues relative to a policy baseline without them, by about $50 billion in 1982 and $210 billion in 1986.<ref name="autogenerated1981">{{cite web|url=https://www.cbo.gov/sites/default/files/97th-congress-1981-1982/reports/81doc11b.pdf|title=An Analysis of President Reagan's Budget Revisions for Fiscal Year 1982-See Table 4|date=March 25, 1981|website=cbo.gov|access-date=June 14, 2020|archive-date=February 4, 2020|archive-url=https://web.archive.org/web/20200204193012/https://www.cbo.gov/sites/default/files/97th-congress-1981-1982/reports/81doc11b.pdf|url-status=live}}</ref>]]
Both CBO and the Reagan Administration forecast that individual and business income tax revenues would be lower if the Reagan tax cut proposals were implemented, relative to a policy baseline without those cuts, by about $50 billion in 1982 and $210 billion by 1986.<ref name="autogenerated1981"/> According to a 2003 Treasury study, the tax cuts in the [[Economic Recovery Tax Act of 1981]] resulted in a significant decline in revenue relative to a baseline without the cuts, approximately $111 billion (in 1992 dollars) on average during the first four years after implementation or nearly 3% GDP annually.<ref>{{cite web |author=Thorndike, Joseph J |publisher=Taxhistory.org |title=Historical Perspective: The Reagan Legacy |date=June 14, 2004 |url=http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/3df8b954567e6c8c85256eb300588d4b?OpenDocument |access-date=November 28, 2007 |archive-date=February 25, 2021 |archive-url=https://web.archive.org/web/20210225011518/http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/3df8b954567e6c8c85256eb300588d4b?OpenDocument |url-status=live }}</ref><ref name=taxtable/> Other tax bills had neutral or, in the case of the [[Tax Equity and Fiscal Responsibility Act of 1982]], a (~+1% of GDP) increase in revenue as a share of GDP. The study did not examine the longer-term impact of Reagan tax policy, including sunset clauses and "the long-run, {{Sic|hide=y|fully|-}}phased-in effect of the tax bills".<ref name=taxtable>{{cite web|author=Treasury Department|publisher=[[United States Department of the Treasury]]|title=Revenue Effects of Major Tax Bills|date=September 1, 2006|url=https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/WP-81.pdf|id=Working Paper 81, Table 2|access-date=November 28, 2007|archive-date=February 25, 2020|archive-url=https://web.archive.org/web/20200225053543/https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/WP-81.pdf|url-status=dead}}</ref> The fact that tax receipts ''as a percentage of GDP'' fell following the Economic Recovery Tax Act of 1981 shows a decrease in tax burden as share of GDP and a commensurate increase in the deficit, as spending did not fall relative to GDP. Total federal tax receipts increased in every Reagan year except 1982, at an annual average rate of 6.2% compared to 10.8% during the preceding eight years.<ref>{{cite web | url=https://fred.stlouisfed.org/graph/?g=kbmr | title=Federal government current tax receipts | date=January 1947 | access-date=June 15, 2018 | archive-date=June 16, 2018 | archive-url=https://web.archive.org/web/20180616030618/https://fred.stlouisfed.org/graph/?g=kbmr | url-status=live }}</ref>

The effect of Reagan's 1981 tax cuts (reduced revenue relative to a baseline without the cuts) were at least partially offset by phased in Social Security payroll tax increases that had been enacted by President Jimmy Carter and the 95th Congress in 1977, and further increases by Reagan in 1983<ref>Agresti, James D. and Stephen F. Cardone (January 27, 2011).[http://www.justfacts.com/socialsecurity.asp#%5B27%5D Social Security Facts] {{Webarchive|url=https://web.archive.org/web/20110807133916/http://www.justfacts.com/socialsecurity.asp#%5B27%5D |date=August 7, 2011 }}. Retrieved March 22, 2011.</ref> and following years, also to counter the uses of tax shelters.<ref>{{Cite news|url=http://www.taxpolicycenter.org/taxvox/downmarketing-tax-shelters|title=The Downmarketing Of Tax Shelters|date=January 18, 2018|work=Tax Policy Center|access-date=January 18, 2018|language=en|archive-date=January 19, 2018|archive-url=https://web.archive.org/web/20180119120337/http://www.taxpolicycenter.org/taxvox/downmarketing-tax-shelters|url-status=live}}</ref> An accounting indicated nominal tax receipts increased from $599 billion in 1981 to $1.032 trillion in 1990, an increase of 72% in current dollars. In 2005 dollars, the tax receipts in 1990 were $1.5 trillion, an increase of 20% above inflation.<ref>{{cite web|url= https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2011/assets/hist01z3.xls|format= xls|title= Table 1.3 – Summary of Receipts, Outlays, and Surpluses or Deficits (-) in Current Dollars, Constant (FY 2005) Dollars, and as Percentages of GDP: 1940–2015|publisher= [[Office of Management and Budget]]|access-date= October 12, 2010|archive-date= October 9, 2021|archive-url= https://web.archive.org/web/20211009105732/https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2011/assets/hist01z3.xls|url-status= live}}</ref>

===Debt and government expenditures===
[[File:United States budget deficit, 1971 to 2001.svg|thumb|left|300px|Budget deficit in billions of dollars, 1971–2001]]
Reagan was inaugurated in January 1981, making the first fiscal year (FY) he budgeted 1982 and the final budget 1989. 
* During Reagan's presidency, the federal debt held by the public nearly tripled in nominal terms, from $738 billion to $2.1 trillion.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=k977|title=Federal Debt Held by the Public|date=May 31, 2018|access-date=June 12, 2018|archive-date=September 23, 2022|archive-url=https://web.archive.org/web/20220923151957/https://fred.stlouisfed.org/graph/?g=k977|url-status=live}}</ref> This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation.<ref name="U.S. Debt"/> Reagan described the new debt as the "greatest disappointment" of his presidency.<ref name="Cannon128"/>
* The federal deficit as percentage of GDP rose from 2.5% of GDP in fiscal year 1981 to a peak of 5.7% of GDP in 1983, then fell to 2.7% GDP in 1989.<ref>{{cite web| url = https://research.stlouisfed.org/fred2/series/FYFSGDA188S| title = Federal Surplus or Deficit as Percent of Gross Domestic Product, Federal Reserve Bank of St. Louis| date = January 1929| access-date = February 23, 2016| archive-date = March 22, 2016| archive-url = https://web.archive.org/web/20160322210703/https://research.stlouisfed.org/fred2/series/FYFSGDA188S| url-status = live}}</ref>
* Total federal outlays averaged of 21.8% of GDP from 1981–88, versus the 1974–1980 average of 20.1% of GDP. This was the highest of any President from Carter through Obama.<ref>{{cite web| url = https://www.cbo.gov/publication/53651| title = CBO-Budget and Economic Outlook 2018-2028-Historical Data-Retrieved June 25, 2018| date = April 9, 2018| access-date = June 25, 2018| archive-date = February 2, 2020| archive-url = https://web.archive.org/web/20200202080730/https://www.cbo.gov/publication/53651| url-status = live}}</ref>
* Total federal revenues averaged 17.7% of GDP from 1981–88, versus the 1974–80 average of 17.6% of GDP.<ref name="cbo.gov">{{cite web |title=The Budget and Economic Outlook: 2014 to 2024 |url=https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/reports/45010-outlook2014feb0.pdf |access-date=9 August 2022 |website=Congressional Budget Office |archive-date=December 4, 2018 |archive-url=https://web.archive.org/web/20181204021501/https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/reports/45010-outlook2014feb0.pdf |url-status=live }}</ref>
* Federal individual income tax revenues fell from 8.7% of GDP in 1980 to a trough of 7.5% of GDP in 1984, then rose to 7.8% of GDP in 1988.<ref>{{cite web|url=http://www.cbo.gov/publication/45010|title=The Budget and Economic Outlook: 2014 to 2024|date=February 4, 2014|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612162542/https://www.cbo.gov/publication/45010|url-status=live}}</ref>

===Business and market performance===
Nominal after-tax corporate profits grew at a compound annual growth rate of 3.0% during Reagan's eight years, compared to 13.0% during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=kag2|title=Corporate Profits After Tax (without IVA and CCAdj)|date=May 30, 2018|access-date=June 13, 2018|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614021357/https://fred.stlouisfed.org/graph/?g=kag2|url-status=live}}</ref> The [[S&P 500 Index]] increased 113.3% during the 2024 trading days under Reagan, compared to 10.4% during the preceding 2024 trading days.<ref>{{cite web|url=https://stooq.com/q/d/?s=%5Espx&c=0&d1=19720120&d2=19890120 |title=^SPX - S&P 500 - U.S. |publisher=Stooq |date= |accessdate=2022-08-19}}</ref> The business sector share of GDP, measured as [[gross private domestic investment]], declined by 0.7 percentage points under Reagan, after increasing 0.7 percentage points during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=kbln|title=Shares of gross domestic product: Gross private domestic investment|date=April 27, 2018|access-date=June 16, 2018}}</ref>

===Size of federal government===
The federal government's share of GDP increased 0.2 percentage points under Reagan, while it decreased 1.5 percentage points during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=kakV|title=Shares of gross domestic product: Government consumption expenditures and gross investment: Federal|date=April 27, 2018|access-date=June 14, 2018|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614045812/https://fred.stlouisfed.org/graph/?g=kakV|url-status=live}}</ref> The number of federal civilian employees increased 4.2% during Reagan's eight years, compared to 6.5% during the preceding eight years.<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=kal4|title=All Employees: Government: Federal|date=June 1, 2018|access-date=June 14, 2018|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614045926/https://fred.stlouisfed.org/graph/?g=kal4|url-status=live}}</ref>

As a candidate, Reagan asserted he would shrink government by abolishing the Cabinet-level departments of energy and education. He abolished neither, but elevated veterans affairs from independent agency status to Cabinet-level department status.<ref>{{cite news|url=https://www.nytimes.com/1987/11/11/us/reagan-would-elevate-va-to-cabinet-level.html|title=Reagan Would Elevate V.A. to Cabinet Level|last=AP|access-date=June 14, 2018|newspaper=The New York Times|date=November 11, 1987|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614052127/https://www.nytimes.com/1987/11/11/us/reagan-would-elevate-va-to-cabinet-level.html|url-status=live}}</ref><ref>{{cite journal|url=http://www.slate.com/articles/briefing/articles/1996/11/unplug_the_doe.html|title=Unplug the DOE!|first=Steve|last=Chapman|date=November 28, 1996|access-date=June 14, 2018|journal=Slate|archive-date=June 14, 2018|archive-url=https://web.archive.org/web/20180614050954/http://www.slate.com/articles/briefing/articles/1996/11/unplug_the_doe.html|url-status=live}}</ref>

===Income distribution===
{{Further|Income inequality in the United States}}
[[File:Trends in US income inequality 1975-2005.jpg|thumb]]
Continuing a trend that began in the 1970s, income inequality grew and accelerated in the 1980s. ''The Economist'' wrote in 2006: "After the 1973 oil shocks, productivity growth suddenly slowed. A few years later, at the start of the 1980s, the gap between rich and poor began to widen."<ref>{{cite news| url = https://www.economist.com/special-report/2006/06/15/the-rich-the-poor-and-the-growing-gap-between-them| title = The Economist-The rich, the poor and the growing gap between them-June 2006| newspaper = The Economist| date = June 15, 2006| access-date = July 1, 2018| archive-date = November 20, 2019| archive-url = https://web.archive.org/web/20191120053637/https://www.economist.com/special-report/2006/06/15/the-rich-the-poor-and-the-growing-gap-between-them| url-status = live}}</ref> According to the CBO: 
*The top 1% of income earners' share of income ''before'' transfers and taxes rose from 9.0% in 1979 to a peak of 13.8% in 1986, before falling to 12.3% in 1989.
*The top 1% share of income earners' of income ''after'' transfers and taxes rose from 7.4% in 1979 to a peak of 12.8% in 1986, before falling to 11.0% in 1989.
*The bottom 90% had a lower share of the income in 1989 vs. 1979.<ref>{{cite web| url = https://www.cbo.gov/publication/53597| title = CBO-The Distribution of Household Income, 2014-Refer to Supplemental Data for Exact Figures-March 19, 2018| date = March 19, 2018| access-date = July 1, 2018| archive-date = April 12, 2018| archive-url = https://web.archive.org/web/20180412233412/https://www.cbo.gov/publication/53597| url-status = live}}</ref>

==Analysis==
[[File:Job Growth by U.S. President - v1.png|thumb|right|350px|Job growth by U.S. President, measured as cumulative percentage change from month after inauguration to end of term. Reagan was second only to Clinton post-1980.<ref>{{cite web| url = https://fred.stlouisfed.org/series/PAYEMS| title = Federal Reserve Economic Data-All Employees Total Non-Farm-Retrieved July 29, 2018| date = January 1939| access-date = December 30, 2017| archive-date = August 18, 2021| archive-url = https://web.archive.org/web/20210818204529/https://fred.stlouisfed.org/series/PAYEMS| url-status = live}}</ref>]]
[[File:Presidential Comparison Real GDP - v1.png|thumb|right|350px|U.S. cumulative real (inflation-adjusted) GDP growth by President.<ref>{{cite web| url = https://fred.stlouisfed.org/series/GDPC1| title = FRED-Real GDP-Retrieved July 1, 2018| date = January 1947| access-date = July 1, 2018| archive-date = August 18, 2021| archive-url = https://web.archive.org/web/20210818210235/https://fred.stlouisfed.org/series/GDPC1| url-status = live}}</ref>]]

According to a 1996 study<ref name="Niskanen1996">(October 22, 1996) – [http://www.cato.org/pubs/pas/pa261.html Supply-Side Tax Cuts and the Truth about the Reagan Economic Record] {{Webarchive|url=https://web.archive.org/web/20210922034211/https://www.cato.org/pubs/pas/pa261.html |date=September 22, 2021 }}, by [[William A. Niskanen]] and Stephen Moore</ref> by the [[Cato Institute]], a libertarian think tank, on 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years. The study asserted that real median family income grew by $4,000 during the eight Reagan years and experienced a loss of almost $1,500 in the post-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency. The only economic variable that was lower during period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but lower in the post-Reagan years.<ref name="Niskanen1996"/> The Cato study was dismissive of any positive effects of tightening, and subsequent loosening, of Federal Reserve monetary policy under "inflation hawk" [[Paul Volcker]], whom President Carter had appointed in 1979 to halt the persistent inflation of the 1970s.

Economic analyst [[Stephen Moore (writer)|Stephen Moore]] stated in the Cato analysis, "No act in the last quarter century had a more profound impact on the U.S. economy of the eighties and nineties than the Reagan tax cut of 1981." He argued that Reagan's tax cuts, combined with an emphasis on federal monetary policy, deregulation, and expansion of free trade created a sustained economic expansion, the greatest American sustained wave of prosperity ever. He also claims that the American economy grew by more than a third in size, producing a $15 trillion increase in American wealth. Consumer and investor confidence soared. Cutting federal income taxes, cutting the U.S. government spending budget, cutting 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.<ref name="Niskanen1996"/>

[[Milton Friedman]] stated, "Reaganomics had four simple principles: Lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy. Though Reagan did not achieve all of his goals, he made good progress."<ref name="Friedman">{{cite web|url=http://www.cato.org/sites/cato.org/files/serials/files/policy-report/1993/8/v15n4.pdf|title=The Real Free Lunch: Markets and Private Property|access-date=June 12, 2018|archive-date=December 12, 2019|archive-url=https://web.archive.org/web/20191212175301/https://www.cato.org/sites/cato.org/files/serials/files/policy-report/1993/8/v15n4.pdf|url-status=live}}</ref>

The [[Tax Reform Act of 1986]] and its impact on the [[alternative minimum tax]] (AMT) reduced nominal rates on the wealthy and eliminated tax deductions, while raising tax rates on lower-income individuals.<ref name="Friedman"/><ref name="Heritage">{{cite web|url=http://www.heritage.org/research/lecture/reaganomics-and-conservatisms-future-two-lectures-in-china|title=Reaganomics and Conservatism's Future: Two Lectures in China|first=Burton|last=Yale|website=The Heritage Foundation|access-date=June 12, 2018|archive-date=December 25, 2016|archive-url=https://web.archive.org/web/20161225050612/http://www.heritage.org/research/lecture/reaganomics-and-conservatisms-future-two-lectures-in-china|url-status=unfit}}</ref><ref>{{cite web |url=http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets/ |title=U.S. Federal Individual Income Tax Rates History, 1913-2011 (Nominal and Inflation-Adjusted Brackets) &#124; Tax Foundation |access-date=August 11, 2012 |url-status=dead |archive-url=https://web.archive.org/web/20120805034153/http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets |archive-date=August 5, 2012 }}</ref><ref name="Ferrara">Ferrara, Peter (May 5, 2011).[https://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/ Reaganomics Vs. Obamanomics: Facts And Figures] {{Webarchive|url=https://web.archive.org/web/20170910183516/https://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/ |date=September 10, 2017 }}. ''Forbes''</ref> The across the board tax system reduced marginal rates and further reduced [[bracket creep]] from inflation. The highest income earners (with incomes exceeding $1,000,000) received a tax break, restoring a flatter tax system.<ref name="Leiserson">{{cite web |last=Leiserson |first=Greg |url=http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf |title=The Individual Alternative Minimum Tax: Historical Data and Projections |year=2008 |publisher=[[Brookings Institution]] & [[Urban Institute]] |access-date=July 29, 2008 |archive-date=September 10, 2008 |archive-url=https://web.archive.org/web/20080910034202/http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf |url-status=dead }}</ref> In 2006, the IRS's National Taxpayer Advocate's report characterized the effective rise in the AMT for individuals as a problem with the tax code.<ref>{{cite web |url=https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf |title=National Taxpayer Advocate 2006 Annual Report to Congress – Executive Summary |publisher=[[Internal Revenue Service]] |access-date=July 29, 2008 |archive-date=June 25, 2008 |archive-url=https://web.archive.org/web/20080625032949/https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf |url-status=live }}</ref> Through 2007, the revised AMT had brought in more tax revenue than the former tax code, which has made it difficult for Congress to reform.<ref name="Leiserson"/><ref>{{cite news |url=http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html |title=Alternative Minimum Tax |year=2008 |newspaper=The New York Times |access-date=July 29, 2008 |first1=Carl |last1=Hulse |first2=Suevon |last2=Lee |archive-date=June 16, 2008 |archive-url=https://web.archive.org/web/20080616112718/http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html |url-status=live }}</ref>

Economist [[Paul Krugman]] argued the economic expansion during the Reagan administration was primarily the result of the [[business cycle]] and the monetary policy by [[Paul Volcker]].<ref name="Roubini-1997">{{cite news | url=http://people.stern.nyu.edu/nroubini/SUPPLY.HTM | work=Stern School of Business | title=Supply Side Economics: Do Tax Rate Cuts Increase Growth and Revenues and Reduce Budget Deficits ? Or Is It Voodoo Economics All Over Again? | year=1997 | access-date=January 10, 2012 | first1=Nouriel | last1=Roubini|authorlink1=Nouriel Roubini}}</ref> Krugman argues that there was nothing unusual about the economy under Reagan because unemployment was reducing from a high peak and that it is consistent with Keynesian economics for the economy to grow as employment increases if inflation remains low.<ref name="krugman">{{Harvnb|Krugman|2004}}: "The secret of the long climb after 1982 was the economic plunge that preceded it. By the end of 1982 the recession in U.S. economy was deeply depressed, with the worst unemployment rate since the Great Depression. So there was plenty of room to grow before the economy returned to anything like full employment."</ref> Krugman has also criticized Reaganomics from the standpoint of wealth and income inequality. He argues that the Reagan era tax cuts ended the post-World War II "Great Compression" of wealth held by the rich.<ref>Krugman, Paul. ''The Conscience of a Liberal'', 2007, W.W. Norton & Co. {{ISBN|0-393-06069-1}} p. 46-48, 145.</ref>

The CBO Historical Tables indicate that federal spending during Reagan's two terms (FY 1981–88) averaged 22.4% GDP, well above the 20.6% GDP average from 1971 to 2009. In addition, the public debt rose from 26.1% GDP in 1980 to 41.0% GDP by 1988. In dollar terms, the public debt rose from $712 billion in 1980 to $2,052 billion in 1988, a three-fold increase.<ref name="CBO Historical Tables"/> Krugman argued in June 2012 that Reagan's policies were consistent with Keynesian stimulus theories, pointing to the significant increase in per-capita spending under Reagan.<ref>{{cite news|url=https://www.nytimes.com/2012/06/08/opinion/krugman-reagan-was-a-keynesian.html|title=Opinion - Reagan Was a Keynesian|first=Paul|last=Krugman|access-date=June 12, 2018|newspaper=The New York Times|date=June 7, 2012|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612210722/https://www.nytimes.com/2012/06/08/opinion/krugman-reagan-was-a-keynesian.html|url-status=live}}</ref>

[[William A. Niskanen|William Niskanen]] noted that during the Reagan years, privately held federal debt increased from 22% to 38% of GDP, despite a long peacetime expansion. Second, the [[savings and loan crisis|savings and loan problem]] led to an additional debt of about $125 billion. Third, greater enforcement of U.S. trade laws increased the share of U.S. imports subjected to trade restrictions from 12% in 1980 to 23% in 1988.<ref name="nisk_concise"/>

Economists [[Raghuram Rajan]] and [[Luigi Zingales]] pointed out that many deregulation efforts had either taken place or had begun before Reagan (note the deregulation of airlines and trucking under Carter, and the beginning of deregulatory reform in railroads, telephones, natural gas, and banking). They stated, "The move toward markets preceded the leader [Reagan] who is seen as one of their saviors."<ref>[[Saving Capitalism from the Capitalists]] p. 268.</ref> Economists [[Paul Joskow]] and Roger Noll made a similar contention.<ref>''American Economic Policy in the 1980s,'' ed. Martin Feldstein, NBER 1994, pp. 371–72.</ref>

Economist [[William A. Niskanen]], a member of Reagan's Council of Economic Advisers wrote that deregulation had the "lowest priority" of the items on the Reagan agenda<ref name="nisk_concise"/> given that Reagan "failed to sustain the momentum for deregulation initiated in the 1970s" and that he "added more trade barriers than any administration since Hoover." By contrast, economist [[Milton Friedman]] has pointed to the number of pages added to the [[Federal Register]] each year as evidence of Reagan's anti-regulation presidency (the Register records the rules and regulations that federal agencies issue per year). The number of pages added to the Register each year declined sharply at the start of the Ronald Reagan presidency breaking a steady and sharp increase since 1960. The increase in the number of pages added per year resumed an upward, though less steep, trend after Reagan left office. In contrast, the number of pages being added each year increased under Ford, Carter, George H. W. Bush, Clinton, George W. Bush, and Obama.<ref>{{Cite news |last=Friedman |first=Milton |date=June 11, 2004 |title=Freedom's Friend |newspaper=The Wall Street Journal |url=http://www.hoover.org/publications/digest/3020261.html |access-date=December 30, 2006 |url-status=dead |archive-url=https://web.archive.org/web/20060927151918/http://www.hoover.org/publications/digest/3020261.html |archive-date=September 27, 2006 }}</ref> The number of pages in Federal Register is however criticized as an extremely crude measure of regulatory activity, because it can be easily manipulated (e.g. font sizes have been changed to keep page count low).<ref>{{cite web|url=http://www.heritage.org/research/reports/2004/09/reining-in-the-regulators-how-does-president-bush-measure-up|title=Reining in the Regulators: How Does President Bush Measure Up?|author=James Gattuso|date=September 28, 2004|publisher=[[The Heritage Foundation]]|access-date=August 21, 2011|archive-date=August 8, 2011|archive-url=https://web.archive.org/web/20110808090330/http://www.heritage.org/Research/Reports/2004/09/Reining-in-the-Regulators-How-Does-President-Bush-Measure-Up|url-status=unfit}}</ref> The apparent contradiction between Niskanen's statements and Friedman's data may be resolved by seeing Niskanen as referring to ''statutory'' deregulation (laws passed by Congress) and Friedman to ''administrative'' deregulation (rules and regulations implemented by federal agencies). A 2016 study by the Congressional Research Service found that Reagan's average annual number of final federal regulatory rules published in the Federal Register was higher than during the Clinton, George W. Bush or Obama's administrations, even though the Reagan economy was considerably smaller than during those later presidents.<ref>{{cite web |date=3 September 2019 |title=Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register |url=https://sgp.fas.org/crs/misc/R43056.pdf |access-date=10 August 2022 |website=FAS Project on Government Secrecy |archive-date=September 1, 2022 |archive-url=https://web.archive.org/web/20220901045011/https://sgp.fas.org/crs/misc/R43056.pdf |url-status=live }}</ref> Another study by the QuantGov project of the libertarian [[Mercatus Center]] found that the Reagan administration added restrictive regulations — containing such terms as "shall," "prohibited" or "may not" — at a faster average annual rate than did Clinton, Bush or Obama.<ref>{{cite web|url=https://www.factcheck.org/2018/01/trumps-numbers/|title=Trump's Numbers - FactCheck.org|date=January 19, 2018|access-date=June 12, 2018|archive-date=June 11, 2018|archive-url=https://web.archive.org/web/20180611172512/https://www.factcheck.org/2018/01/trumps-numbers/|url-status=live}}</ref>

[[Greg Mankiw]], a conservative Republican economist who served as chairman of the [[Council of Economic Advisers]] under President George W. Bush, wrote in 2007:
<blockquote>I used the phrase "charlatans and cranks" in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't ... My other work has remained consistent with this view. In a paper on dynamic scoring, written while I was working at the White House, Matthew Weinzierl and I estimated that a broad-based income tax cut (applying to both capital and labor income) would recoup only about a quarter of the lost revenue through supply-side growth effects. For a cut in capital income taxes, the feedback is larger — about 50 percent — but still well under 100 percent. A chapter on dynamic scoring in the 2004 Economic Report of the President says about the same thing.<ref>{{cite web|url=https://gregmankiw.blogspot.com/2007/07/on-charlatons-and-cranks.html|title=Greg Mankiw's Blog: On Charlatans and Cranks|access-date=16 June 2018}}</ref></blockquote>

[[Glenn Hubbard (economist)|Glenn Hubbard]], who preceded Mankiw as Bush's CEA chair, also disputed the assertion that tax cuts increase tax revenues, writing in his 2003 Economic Report of the President: "Although the economy grows in response to tax reductions (because of higher consumption in the short run and improved incentives in the long run), it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity."<ref>{{cite web |url=http://www.presidency.ucsb.edu/economic_reports/2003.pdf |title=Archived copy |access-date=June 16, 2018 |archive-date=November 14, 2017 |archive-url=https://web.archive.org/web/20171114180105/http://www.presidency.ucsb.edu/economic_reports/2003.pdf |url-status=dead }}</ref>

In 1986, [[Martin Feldstein]] — a self-described "traditional supply sider" who served as Reagan's chairman of the [[Council of Economic Advisers]] from 1982 to 1984 — characterized the "new supply siders" who emerged circa 1980:

<blockquote>What distinguished the new supply siders from the traditional supply siders as the 1980s began was not the policies they advocated but the claims that they made for those policies ... The "new" supply siders were much more extravagant in their claims. They projected rapid growth, dramatic increases in tax revenue, a sharp rise in saving, and a relatively painless reduction in inflation. The height of supply side hyperbole was the "Laffer curve" proposition that the tax cut would actually increase tax revenue because it would unleash an enormously depressed supply of effort. Another remarkable proposition was the claim that even if the tax cuts did lead to an increased budget deficit, that would not reduce the funds available for investment in plant and equipment because tax changes would raise the saving rate by enough to finance the increased deficit ... Nevertheless, I have no doubt that the loose talk of the supply side extremists gave fundamentally good policies a bad name and led to quantitative mistakes that not only contributed to subsequent budget deficits but that also made it more difficult to modify policy when those deficits became apparent.<ref>{{cite web |last=Feldstein |first=Martin |title=NBER Working Paper Series |url=https://www.nber.org/papers/w1792.pdf |access-date=9 August 2022 |website=National Bureau of Economic Research |archive-date=June 2, 2018 |archive-url=https://web.archive.org/web/20180602123714/http://www.nber.org/papers/w1792.pdf |url-status=live }}</ref></blockquote>
==See also==
{{Portal|1980s|Economics|Politics|United States}}
* [[Abenomics]]
* [[Economic policy of the Joe Biden administration|Bidenomics]]
* [[Economic policy of the Bill Clinton administration]]
* [[Mellonomics]]
* [[Monetarism]]
* [[Mont Pelerin Society]]
* [[Economic liberalism]]
* [[Fiscal conservatism]]
* [[Neoliberalism]]
* [[Orbanomics]]
* [[Phillips curve]]
* [[Rogernomics]]
* [[Thatcherism]]
* [[Economic policy of the first Donald Trump administration]]

==Footnotes==
{{Reflist|30em}}

==References==
{{Refbegin}}
* Bienkowski Wojciech, Brada Josef, Radlo Mariusz-Jan eds. (2006) ''Reaganomics Goes Global. What Can the EU, Russia and Transition Countries Learn from the USA?'', Palgrave Macmillan.
* [[Michael Boskin|Boskin Michael J.]] (1987) ''Reagan and the US Economy. The Successes, Failures, and Unfinished Agenda'', ICEG.
* {{Cite news |issn=0362-4331 |last=Krugman |first=Paul |author-link=Paul Krugman |title=An Economic Legend |work=The New York Times |access-date=March 25, 2010 |date=June 11, 2004 |url=https://www.nytimes.com/2004/06/11/opinion/11KRUG.html |archive-date=December 9, 2011 |archive-url=https://web.archive.org/web/20111209214203/http://www.nytimes.com/2004/06/11/opinion/11KRUG.html |url-status=live }}
* [[William A. Niskanen|Niskanen, William A.]] (1988) ''Reaganomics: An Insider's Account of the Policies and the People'', Oxford University Press, Oxford.
{{Refend}}
* Marable Manning. (1981) ''Reaganism, Racism, and Reaction: Black Political Realignment in the 1980s'',  [[Taylor & Francis|Taylor & Francis, Ltd.]]
* Bowser, Benjamin. (1985) ''Race Relations in the 1980s: The Case of the United States'', Sage Publications Incorporated.

==Further reading==
* [[Jonathan Chait]], ''The Big Con: Crackpot Economics and the Fleecing of America'', 2008, Mariner Books (Re-print edition), {{ISBN|0547085702}}
* Brian Domitrovic, ''Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity (Culture of Enterprise Series)'', 2009, [[Intercollegiate Studies Institute]], {{ISBN|193519125X}}
* [[Michael Lind]], ''Up From Conservatism: Why the Right is Wrong for America'', 1996, Free Press, {{ISBN|0684827611}}
* [[Lawrence B. Lindsey]], ''The Growth Experiment: How the New Tax Policy is Transforming the U.S. Economy'', 1990, Basic Books, New York, {{ISBN|978-0465050703}}
* [[James Tobin]], [https://archive.org/details/sim_boston-phoenix_1981-12-08_10_49/mode/1up ''Applied Reaganomics''] ''The Boston Phoenix'' 8 December 1981

==External links==
* {{cite web|last=Laffer|first=Arthur|title=The four pillars of Reaganomics|publisher=[[The Heritage Foundation]]|url=https://www.heritage.org/report/the-four-pillars-reaganomics|archive-url=https://web.archive.org/web/20170227062156/http://www.heritage.org/report/the-four-pillars-reaganomics|url-status=unfit|archive-date=February 27, 2017}}
* {{cite web | title =Reaganomics | publisher =[[University of Houston]] | url =http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=406 | url-status =dead | archive-url =https://web.archive.org/web/20100723152936/http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=406 | archive-date =July 23, 2010 }}
*Greider, William. "[https://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760 The Education of David Stockman]", The Atlantic, December 1981.  
* {{cite journal | last=Komlos | first=John | title=Reaganomics: A Watershed Moment on the Road to Trumpism | journal=The Economists' Voice | volume=16 | issue=1 | date=2019-12-18 | issn=1553-3832 | doi=10.1515/ev-2018-0032 | url = https://www.degruyter.com/document/doi/10.1515/ev-2018-0032/html| url-access=subscription }}

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