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Ronald Reagan Presidential Library, National Archives and Records Administration







In his inaugural address after taking the oath of office on January 20, Ronald Reagan called upon Americans to "begin an era of national renewal." In response to the serious problems facing the country, both foreign and domestic, he asserted his familiar campaign phrase: "Government is not the solution to our problem, government is the problem." He hoped that America "will again be the exemplar of freedom and a beacon of hope for those who do not have freedom."




Arguably the first conservative U.S. president in over 50 years, Reagan advanced domestic policies that featured a lessening of federal government responsibility in solving social problems, reducing restrictions on business, and implementing tax cuts. Internationally, Reagan demonstrated a fierce opposition to the spread of communism throughout the world and a strong distrust of the Soviet Union, which in 1983 he labeled an "evil empire." He championed a rearmed and strong military and was especially supportive of the MX missile system and the Strategic Defense Initiative ("Star Wars") program.






Economic Policy


When Reagan took office the economy was one of the double-digit inflation and high interest rates. During the campaign Reagan promised to restore the free market from excessive government regulation and encourage private initiative and enterprise.




Reagan's economic policies came to be known as "Reaganomics," an attempt, according to Lou Cannon, to "balance the federal budget, increase defense spending, and cut income taxes." The President vowed to protect entitlement programs (such as Medicare and Social Security) while cutting the outlays for social programs by targeting "waste, fraud and abuse." Reagan embraced the theory of "supply side economics," which postulated that tax cuts encouraged economic expansion which in turn increased the government's revenue at a lower tax rate.




During his first year in office, Reagan engineered the passage of $39 billion in budget cuts into law, as well as a massive 25 percent tax cut spread over three years for individual, and faster write-offs for capital investment for business. At the same time, he insisted on, and for the most part, was successful in gaining increased funding for defense.




Although inflation dropped from 13.5% in 1980 to 5.1% in 1982, a severe recession set in, with unemployment exceeding 10% in October, 1982 for the first time in forty years. The administration modified its economic policy after two years by proposing selected tax increases and budget cuts to control rising deficits and higher interest rates. After the 1982 downturn, the reduced inflation rate (under 5% for the remainder of the administration) sparked record economic growth, and produced one of the lowest unemployment rates in modern U.S. history (unemployment hit a 14 year low in June of 1988). As Reagan left office, the nation was experiencing its sixth consecutive year of economic prosperity.




The economic gains, however, came at a cost of a record annual deficit and a ballooning national debt. The budget deficit was exacerbated by a trade deficit. Americans continued to buy more foreign-made goods than they were selling. Reagan, however adhered to his free trade stance, and signed an agreement to that effect with Canada. He also signed, reluctantly, trade legislation designed to open foreign markets to U.S. goods.






Domestic Affairs


Reagan's domestic policies had a major impact on the American people and will have for many years. He followed p the passage of the largest tax cut in
U.S. history by supporting and signing into law the Tax Reform law of 1986. Reagan led the battle for a Social Security reform bill designed to ensure the long-term solvency of the system, and oversaw the passage of immigration reform legislation, as well as the expansion of the Medicare program to protect the elderly and disabled against "catastrophic" health costs.




Reagan elevated William Rehnquist to the position of the Chief Justice of the Supreme Court and appointed three justices to the bench: Anthony Kennedy, Antonin Scalia, and the first woman named to the Supreme Court, Sandra Day O' Connor. In all of the court appointments, Reagan chose individuals who he believed would exercise "judicial restraint."




Reagan consistently received very high approval ratings, although he was not popular with some minority groups, particularly blacks, many of whom did not benefit from the economic prosperity. In 1986, over 30 percent of the black population had an income below the official poverty level. While many labor leaders disliked Reagan, especially after he fired the air traffic controllers, when they refused to end their strike (1981), he was popular with labor union members.




Reagan encouraged the development of "private sector initiatives" as well as federalism, with the objective of transferring from the federal government some of the responsibilities believed to be better served by private business or state and local government.




As the president called for international cooperation to stop the influx of illegal drugs, especially cocaine, into the U.S., First Lady Nancy Reagan led the campaign against drug abuse, urging the nation's youth to "just say no."






Foreign Policy


At the heart of Reagan's foreign policy was the prevention of communist expansion. This was demonstrated in the Western Hemisphere by the strong financial and military support of the Contras against the communist Nicaraguan government, the aid given to the government of El Salvador in their fight against the communist guerrillas, and the U.S. invasion of Grenada when that nation was perceived as falling under Cuban domination in 1983, and the support given to rebels fighting Soviet troops in Afghanistan. While effort for peace in
Central America faltered, the Soviets announced the withdrawal of forces from Afghanistan in 1988, ending their futile eight year war.




Reagan believed that the nation should negotiate with the Soviet Union from a position of strength. To such an end, the administration embarked on a strategic modernization program which included the production of intercontinental missile and a feasibility study for the Strategic Defense Initiative. The increase in military spending, and the rise of Mikhail Gorbachev as General Secretary of the Soviet Union at the beginning of Reagan's second term, opened a new era of relations between the two superpowers. After a number of meetings between Reagan and Gorbachev, the two men signed an Intermediate Nuclear Force (INF) Treaty at the Washington Summit in December, 1987. The agreement promised to eliminate an entire class of intermediate-range nuclear missiles and was the first arms control agreement in history to reduce the nuclear arsenal. In addition, the administration began the Strategic Arms Reduction Talks (START) which would reduce the strategic nuclear arsenals by 50%, including large multiple warhead missiles.




When pro-U.S. dictators in Haiti and the Philippines appeared on the verge of being toppled from power, Reagan engineered their safe removal from their countries, ensuring bloodless coups and new government which, he hoped, would be friendly to the U.S.




In Middle East affairs, Reagan reported in his inaugural address that the 52 American hostages held in Iran for 444 days were at that moment being released and would soon return to freedom. The President maintained a firm stance against terrorism, exemplified by the American retaliating against Libya for an air attack in 1981 and again in 1986 for the death of Americans in a Berlin discotheque. Reagan's peacekeeping force in war-torn Lebanon experienced tragedy in 1983 when a truck bomb killed 241 soldiers. Tragedy struck again in 1987 when a missile from an Iraqi warplane killed 37 sailors aboard the U.S.S. Stark, part of a U.S. naval taskforce which had been sent to the Persian Gulf to keep that waterway open during the Iran-Iraq war.




The darkest hour of the Reagan administration would become known as the Iran-Contra affair. After lengthy, nationally televised hearings, a special congressional hearings review board reported that Reagan authorized the sale of arms to Iran in exchange for help in freeing U.S. hostages in Lebanon. It was revealed that the money gained from the arms sale illegally diverted to aid the Contras, opponents of the Nicaraguan Sandinista government. The congressional report criticized Reagan for his detached, hands-off style of management. In the aftermath of the affair, National Security Advisors Robert McFarlane and John Poindexter, as well as National Security Council aide Colonel Oliver North were indicted by a federal grand jury and convicted of lying to Congress.






The Reagan Legacy


The eight years of the Reagan presidency was one of the most dynamic periods, in recent
U.S. history, resulting in a major refocusing of the nation's social, business, and international agenda. Few presidents have enjoyed the affection of so many of the American people. Support for Ronald Reagan grew when he was seriously wounded by an assassin's bullet in 1981 and during major surgical procedures in 1985 and 1987. Reagan was known as the "Great Communicator," and often went on television to ask the viewers for their support for a particular piece of legislation. When he ran for a second term in 1984 against former Vice-President Walter Mondale, Reagan stood by his record and asked the voters if they were better off now than they were four years ago. At 73 years of age, Reagan became the oldest man ever elected president, receiving 525 electoral votes, the most of any presidential candidate. As his second term ended, polls showed that more than half of the American people gave him a favorable rating. When Ronald Reagan became president, he had a clear vision of what the nation should be and spelled out the direction he hoped it would take during his administration. Reagan had a clear social, economic, and foreign policy agenda, and with political guile and personal persuasiveness he was able to achieve many of his goals. Early in his presidency, Reagan remarked: "What I'd really like to do is go down in history as the President who made Americans believe in themselves again."




A month before the election of his successor, Reagan looked back on his eight years in office: "I am the same man I was when I came to Washington," he said, "I believe the same things I believed when I came to Washington, and I think those beliefs have been vindicated by the success of the policies to which we hold fast." About his foreign policy, he said, "At every point on the map that the Soviets have applied pressure, we've done all we can to apply pressure against them." He went on "And now we are seeing a sight many believed they would never see in our lifetime: the receding of the tide of totalitarianism."




There is little doubt that the many changes effected by the Reagan presidency will play a major role in shaping America's future as it concludes the 20th century.