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The New Outlook of the
Reagan Years
1981-1988
Chapter 21
Section 1
 Jimmy
Carter was defeated for
reelection in 1980 by a former
movie star and two-term governor
of California, Ronald Reagan.
 Reagan was elected governor of
California in 1966 and reelected in
1970.
 Reagan won the Republican
nomination easily in 1980 and
went on to defeat the Democrats’
choice, President Carter, in a
landslide victory.
 Reagan
proved to be an
extremely popular president.
(One of the most popular in
American history)
 As an experienced entertainer,
he knew how to use the TV
medium to project a pleasing
personality to a mass audience.
 Unlike Jimmy Carter, Reagan
took a firm stand on domestic
issues.
 He
believed in
reducing taxes,
reducing government
spending on social
programs, and
increasing
government
spending on defense.
 His policies had a
positive effect on the
business and middle
classes and a
negative effect on
the poor.
Reagan- The New Federalism
and Growth of Conservatism
A
major issue that arose
under the Reagan presidency
was whether it was primarily
the job of the federal
government or of the state
government to combat crime,
reform schools, and provide
for general welfare.
 The
Republican presidents elected in
the 1970s and 1980s (Nixon, Ford,
Reagan, and Bush) believed that the
chief responsibility for social welfare
lay with the state and local
authorities.
 Nixon used the term New Federalism
to describe his plan for giving the
states freedom to decide how to use
federal grants.
 Reagan adopted the same policy and
urged the states to take more
responsibility for solving social and
economic problems.
Supply-Side Economics
 The
US inflation rate increased to 13
percent under President Carter.
 The problem was partly the result of
government spending on the Vietnam
War.
 It was also the result of high oil
prices caused by the Arab oil
embargo.
 The failure for Carter to find a cure
for inflation was one reason why he
was not elected for a second term.
 Reagan’s
efforts to deal with
inflation solved this problem only
to create huge budget deficits.
 Reagan’s approach to the muddle
was based on a theory called
supply side economics.
 Conservatives who supported this
theory believed that the economy
would benefit if government spent
less money and businesses spent
more.
 Best
way to accomplish this is to cut
federal taxes.
 Businesses would then have more
money to invest in productive
enterprises, and consumers would
receive more income from this
economic boom to buy goods and
services.
 At the same time, the government
would make cuts in welfare
programs, which were considered
wasteful by Reagan and other
conservatives.
 The
inflation rate dropped to 6
percent in 1982 and less than
4 percent in 1983.
 Prosperity returned in 1984
and continued for the rest of
the decade but staggering
budget deficits were a new a
problem.
Tax Reform Act in 1986
 Reagan
reformed the tax system during
his second term.
 Congress passed the Tax Reform Act in
1986.
 Previous tax laws had divided taxpayers
into several brackets, according to their
earned income.
 The higher the taxable income, the
higher the percentage of income paid in
taxes.
Trickle Down Economics
 People
with very high incomes
benefited most from this
reform law.
 Instead of being taxed at a 50
percent rate, as formerly, they
paid just 28 percent.
 Thus a millionaire was in the
same tax bracket as a person
earning $30,000 a year.
Question
 Why
did Reagan and the
Conservatives feel the Trickle Down
Economics would help the American
Economy?
Budget Deficit
 If
the government spends more than it
collects in taxes, it ends the year with a
deficit.
 The opposite result more money received
than money spent is known as a surplus.
 To make up the difference between
expenses and income, the government
had to borrow millions and even billions
of dollars each year.
 In other words the government went
heavily into debt.
The
debt was kept at a
reasonably manageable level
through the early 1960s.
After the Vietnam War,
however, the national debt
exceeded $500 billion and
rapidly climbed to nearly $1
trillion when Ronald Reagan
submitted his first budget to
Congress in 1981.
United States National Debt
Clock
 http://www.brillig.com/debt_clock/
Effects of “Reaganomics”
 Critics
of President Reagan’s
economic policy warned that
“Reaganomics” (as they called the
supply-side theory) would result in
huge deficits.
 Reagan’s tax cuts of 1981 mean
lower government revenues.
 At the same time, increased
government spending for defense
meant higher government
expenditures.
 Many
economists were alarmed by
these run away budget deficits.
 They pointed out that, as deficits
rose, so did the burden of paying
interest on the national debt.
 By 1990 interest payments cost the
government about $150 billion
annually.
 Partly because of the debt burden,
the government was less able to
spend adequate sums for urgent
national needs such as highway
repair and health care.
Deregulation of Business
 Deregulation
meant removing
many governmental rules that had
limited and controlled business
competition.
 The Reagan years saw a huge
increase in business mergers
because little was done to enforce
the antitrust laws because he cut
back the rule making to allow
businesses greater freedoms.
Environmental and Civil Rights
 President
Reagan’s belief in reduced
involvement by the federal government
led to decreased support for environment
measures during his administration.
 Reagan believed that environmental
efforts would lead to higher costs for
business and higher prices for
consumers.
 Reagan signed into law to have Martin
Luther King Jr,. Day be a national holiday.
Effects on Minorities
 President
Reagan’s policy of
reducing government spending
on social programs represented a
setback for the poor during the
1980s.
 Major cuts in welfare and other
social services in which many
minorities were a part of were
greatly effected.
Engel v. Vitale
 Engel
v. Vitale (1962), was a
landmark United States Supreme
Court case that determined that it is
unconstitutional for state officials to
compose an official school prayer and
require its recitation in public
schools.
 In violation of the principle of
separation of church and state.
Abington School District v.
Schempp



Abington School District v. Schempp was a
United States Supreme Court case argued on
February 27–28, 1963 and decided on June 17,
1963.
In the case, the Court decided 8-1 in favor of
the respondent, Edward Schempp, and
declared school sponsored Bible reading in
public schools in the United States to be
unconstitutional.
The case was part of a string of Supreme Court
cases ruling on the place of religion in public
schools, and was both condemned by some
religious conservatives and celebrated by
those who supported constitutional separation
of church and state.
Tinker v. Des Moines
Independent Community School
District
Petitioners, three public school pupils in
Des Moines, Iowa, were suspended from
school for wearing black armbands to
protest the Government's policy in
Vietnam.
 The Supreme Court decided that students
could not be penalized for wearing black
armbands to school to protest the Vietnam
War.
 It argued that students do not “shed their
constitutional rights to freedom of speech
or expression at the schoolhouse gate.”

New Jersey vs. TLO (1985)
 In
this case, a high school
freshman in New Jersey had been
found smoking in the school
bathroom.
 She was made to open her purse.
 In her purse, school officials found
wrapping paper for tobacco or
marijuana, a list of students who
owed her money, and a substantial
amount of cash.
 The
student was found to be
delinquent and sentenced to
one-year probation.
 The Supreme Court ruled that
the school acted reasonably to
maintain order and discipline.
 It held that reasonable suspicion
for searches and seizures in
schools need not be based on the
“probable cause” provision of
the Fourth Amendment.
Vernonia School District v. Acton
(1995)
 In
this case, the Supreme Court
ruled that a school district has the
right to institute a student
athletic drug policy that includes
the random testing of urine for
drugs.
 The Court held that the policy did
not violate the Fourth Amendment
right to privacy of the students.
 It
notes that students athletes are
already required to take medical
tests prior to approval for student
teams.
 Thus, the addition of a drug test
need not be based on suspicion of
drug use among individual students.
 The Court held that the state may
exercise a greater degree of
supervision over students in public
schools than it could exercise over
adults.