Download It`s the Economy, Stupid

IT’S THE
ECONOMY,
STUPID
Unit 1
Lesson 2
Big Idea: The success or failure of an administration often
hinges on the economy,
despite the fact there are other controlling factors.
Objectives
• To compare Keynesian and Supply-Side
Economic theories.
• To evaluate successes and failures of the
Reagan, Clinton, and Bush economic plans.
• To identify additional factors influencing the
success or failure of the overall economy.
• To analyze causes of current economic crisis and
research government interventions.
Warm up:
• What was this video
clip about? How does
it relate to our current
studies?
Key Economic Terms
• Deficit – difference between what govt takes in
(taxes) and what it spends annually
• Difference must be borrowed…aka deficit spending
• Debt – accumulated debt govt owes from yrs of
borrowing to pay off annual deficits
• Owed to people, co’s, state/local govts, foreign govts
• Debt Ceiling – cap on amt of debt fed govt can
borrow
• Interest – rate paid on borrowed money
Key Economic Terms
•Surplus – take in more than spend
• Subtracts from total debt
•Inflation – rate of increase in the price of goods and
•
•
services over a given period of time
Dollar buys less
2-3% good
•Stagflation – inflation, high unemployment, and
stagnate economy
•Recession – an economic downturn, slow business
activity
Reagan(omics)
• Supply-Side Economics
• Tax cuts to rich … “Trickle-down”
• $ invested in business = produce more = more jobs
= more income = more spending = more taxes
(revenue)
• Deregulation-energy, transportation, banking, cut
size and# regulatory agencies
• New Federalism
• Social funding cut 10%...left to States
• Increased Defense Spending
Reagan(omics)
•The Good
• Inflation rate down
• Stocks soar
• Employment up
• Streamline tax code
•The Bad
• Deficit up ($3 trillion)
• Stock scandals
• Crash ’87
• S & L Bailout
• Unequal distribution $
• Farm Crisis
• Manufacturing Losses
 Discovery Education:
• Recession ‘90s
 http://app.discoveryeducation.com/player/view/assetGuid/542FCB5E-759E-4C11881B-33193F51B6B4
Bush and “No New Taxes”
•1990s Recession & Rising Nat’l Deficit = NEW
TAXES = No re-election!
•The Bad
• International Trade Deficit
• Unemployment Up, Poverty Rates Up, Welfare
Programs Cut
•The Good?
• NAFTA
Clinton’s “Fiscal Discipline”
•Tax increases (on wealthy) & spending cuts
to reduce deficit
•Dot.com boom = ↑ tax revenue (salary &
capital gains)
•Balanced Budget
•Left office with $127 b budget surplus
•Pay down debt…not erased
•On track to pay off debt b/t 2008-2015?
Closure
• How does
knowing all of this information impact you?
• Why is it important to know?