The Rise of Conservatism

GabeAmerican History(ML), Mini Lessons

From Common Sense American History eBook:

On Jan. 20, 1981, Ronald Reagan was inaugurated as president on a cold but clear day. The former New Deal Democrat turned conservative Republican told the nation, “In the present crisis, government is not the solution to our problems, government is the problem,” rattling off the issues of greater regulation, larger spending programs and higher taxes as impediments to economic growth. In his first six months in office, he focused on the economy and on securing a large tax cut as the centerpiece of what was called Reaganomics.

Reagan’s focus was on reducing marginal tax rates, ending the windfall profits tax on oil, reducing corporate and capital gains taxes, and pressing for deregulation. He emphasized cuts in government spending and especially focused on cuts to social programs and entitlements. He worked effectively with congressional Republicans and maintained good relations with the Democratic Party-controlled House of Representatives.

Reagan inherited an economy on the brink of recession, and he found it politically difficult to secure cuts in government spending as unemployment soared throughout 1981 and 1982. Unemployment reached a post-Great Depression high of 10 percent.

Federal Reserve Bank Chairman Paul Volcker raised interest rates with the intent of wiping out inflation. High interest rates reduce the supply of money circulating in the economy by making it expensive for businesses or consumers to borrow money.

President Reagan was shot in an attempted assassination on March 31, 1981, and while he recovered from his near-death experience, he endeared himself to the public by the grace with which he handled the situation. He continued to push for his tax cut, telling Congress in April 1981 that the tax cut would lead to tremendous economic growth.

Confounding skeptics and critics in the media who saw Reagan as old and out of touch, he secured the votes in Congress and the tax cut passed on Aug. 4, 1981. Its sponsors, Jack Kemp and William Roth, were able to secure decreases from 70 to 50 percent in the highest tax rate and cuts in the lowest rates from 14 to 11 percent. Corporate taxes were also slashed and the tax cut allowed for the indexing of taxes for inflation. This phenomenon, known as “bracket creep,” had pushed so many Americans into higher tax brackets during the 1970s. …

  1. What do you think Reagan meant when he said “we are a people with a government, not the other way around”?
  2. What do you think of Reagan’s comment that “Government is not the solution. Government is the problem”?
  3. One of the key questions Reagan asked during the presidential debate against Jimmy Carter in 1980 was, “Are you better off than you were four years ago?” Do you think that is a fair question to use as a standard for judging a president? If so, how would you answer that question today?

This reading is an excerpt from Certell’s Common Sense American History eBook.  Certell offers curriculum materials and eBooks free of charge for students and teachers.  Click Here to download the Common Sense American History materials.

Image Citation:

6 April, 2018, Ronald Regan {Digital photograph].  Retrieved from <>.