In 1981 Ronald Reagan became president. He cut taxes, deregulated several industries, and appointed conservative justices. He began a massive military buildup that greatly increased the deficit and sent aid to insurgent groups fighting communism.

The Road to the White House

How did Reagan’s early personal experiences influence his political beliefs?

At age 15, Ronald Reagan worked as a lifeguard on the Rock River in Illinois. Reagan later wrote that this experience taught him quite a bit about human nature:

"Lifeguarding provides one of the best vantage points in the world to learn about people. During my career at the park, I saved seventy-seven people. I guarantee you they needed saving—no lifeguard gets wet without good reason. . . . Not many thanked me, much less gave me a reward. . . . They felt insulted. . . . I got to recognize that people hate to be saved."

—from Where’s the Rest of Me?, 1965

Along with a philosophy of self-reliance and independence, Reagan took the belief that people do not want to be saved to the White House.

Becoming a Conservative

Reagan’s adult experiences also swayed him toward conservative views. After graduating from Eureka College in 1932, he worked as a radio broadcaster and became a Hollywood actor in the late 1930s. In 1947 Reagan became the president of the Screen Actors Guild—the actors’ union. As president of the Screen Actors Guild, he testified before the House Un-American Activities Committee. Reagan had been a liberal Democrat, but dealing with Communists in the union shifted him toward conservative Republican ideas.

In the 1950s, Reagan traveled the nation to promote a television program that he hosted. During these travels, he said, he met many people who complained about big government. By the time he ran for governor of California in 1966, Reagan was a committed conservative. Reagan won the election and was reelected in 1970. Ten years later, he won the Republican presidential nomination.

The Election of 1980

Reagan’s campaign appealed to frustrated Americans by promising to cut taxes and increase defense spending. He won the support of social conservatives by calling for a constitutional amendment banning abortion. Reagan won the election easily. For the first time since 1954, Republicans also gained control of the Senate.

Domestic Policies


If you were president, how would you fight stagflation?

Ronald Reagan believed that the key to restoring the economy and overcoming problems in society was to get Americans to believe in themselves again. “In this present crisis,” he claimed, “government is not the solution to our problem; government is the problem.”

Before you read the rest of the lesson, look through the lesson at visuals, headings, and the bold-faced terms. Write down predictions about President Reagan's policies. When you come to these features as you read, check to see if your predictions are correct.


Reagan first turned to the lingering problem of stagflation. Conservative economists offered two competing ideas for fixing the economy. One group supported raising interest rates to combat inflation. The other group supported supply-side economics. They believed that high taxes took too much money away from investors, and that tax cuts could provide extra money to expand businesses and create new jobs. The result would be a larger supply of goods for consumers, who would now have more money to spend because of the tax cuts.

Reagan adopted supply-side economics. He encouraged the Federal Reserve to keep interest rates high and asked Congress to pass a massive 25 percent tax cut. Critics called his approach Reaganomics or “trickle-down economics.” They believed Reagan’s policy would help corporations and wealthy Americans, but little wealth would “trickle down” to middle-class or poor Americans.

Cutting Programs Lower taxes increased the budget deficit—the amount by which expenditures exceed income. To keep the deficit under control, Reagan proposed cuts to social programs, including food stamps, school lunches, Medicare payments, unemployment compensation, and student loans.

After a struggle, Congress passed most of these cuts, but the fight convinced Reagan that Congress would never cut spending enough to balance the budget. He decided that cutting taxes and building up the military were more important than balancing the budget.

Deregulation Reagan believed that excessive government regulation was another cause of the economy’s problems. His first act as president was to sign an executive order to end price controls on oil and gasoline. Other deregulation in broadcasting, banking, and automotive industries soon followed. Increased oil drilling, mining, and logging on public land angered environmentalists, as did EPA decisions to ease regulations on pollution-control equipment and to reduce safety checks on chemicals and pesticides.

Reagan Wins Reelection By 1984, the nation had begun the biggest economic expansion in its history. Incomes climbed and unemployment fell. The recovery made Reagan very popular, and he won the 1984 presidential election in a landslide against Democrats Walter Mondale and Representative Geraldine Ferraro, the first woman nominated to run for vice president for a major party.

Shifting the Judicial Balance

Reagan tried to bring a strict constructionist outlook to the federal judiciary, wanting judges there who followed the original intent of the Constitution. He changed the Supreme Court by nominating moderate conservative Sandra Day O’Connor, who became the first female justice in 1981. In 1986 Reagan chose conservative associate justice William Rehnquist to succeed retiring chief justice Warren Burger, and named conservative judge Antonin Scalia to fill Rehnquist’s vacancy. After the Senate denied the confirmation of conservative Robert Bork in 1987, Reagan nominated moderate Anthony Kennedy as a new associate justice.

Reagan Oversees a Military Buildup


Why did Reagan build up the military?

Reagan also adopted a new foreign policy that rejected both containment and détente. He called the Soviet Union “an evil empire.” In his view, the United States should try to defeat evil, not contain or negotiate with it.

“Peace Through Strength”

In Reagan’s opinion, the only option in dealing with the Soviet Union was “peace through strength,” a phrase he used during his campaign. Reagan launched a $1.5 trillion military buildup meant to bankrupt and destroy the Soviet Union if it tried to keep up. The United States also tried to stop nations from supporting terrorism. After Libya backed a terrorist bombing in Berlin, the United States launched an air attack on Libya on April 14, 1986.

Reagan’s military buildup created new jobs in defense industries. Supply-side economists had predicted that, despite the spending, lower taxes and cuts in government programs would generate enough revenue growth to balance the budget. Although tax revenues rose, Reagan could not cut popular programs significantly. The annual budget deficit went from $80 billion to more than $200 billion.

The Reagan Doctrine

Reagan believed that the United States should support guerrilla groups who were fighting to overthrow Communist or pro-Soviet governments. This policy became known as the Reagan Doctrine.

Aid to Afghan Rebels Perhaps the most visible example of the Reagan Doctrine was in Afghanistan. In 1979 Soviet troops had invaded Afghanistan. Reagan sent hundreds of millions of dollars in covert military aid to Afghan guerrillas who were fighting the Soviets. As casualties mounted, the war strained the Soviet economy, and in 1988 the Soviets decided to withdraw.

Nicaragua and Grenada Reagan was also concerned about Soviet influence in Nicaragua. Rebels known as the Sandinistas had overthrown a pro-American dictator in Nicaragua in 1979, set up a socialist government, and accepted Cuban and Soviet aid. The Reagan administration responded by secretly arming an anti-Sandinista guerrilla force known as the contras. When Congress learned of this policy, it banned further aid to the contras. In Grenada, radical Marxists overthrew the left-wing government in 1983. Reagan sent in troops, who quickly defeated the Grenadian and Cuban soldiers, and a new anti-Communist government was put in place.

The Iran-Contra Scandal Despite the congressional ban, individuals in Reagan’s administration illegally continued to support the Nicaraguan rebels. They also secretly sold weapons to Iran, considered an enemy and sponsor of terrorism, in exchange for the release of American hostages in the Middle East. Profits from the weapons sales were then sent to the contras. News of these operations broke in November 1986. U.S. Marine colonel Oliver North and senior National Security Council members and CIA officials admitted before Congress to covering up their actions. President Reagan had approved the sale of arms to Iran, but the congressional investigation concluded that he had had no direct knowledge about the diversion of the money to the contras.

Arms Control

As part of the military buildup, Reagan decided to place missiles in Western Europe to counter Soviet missiles. When protest erupted worldwide, he offered to cancel the new missiles if the Soviets removed their missiles from Eastern Europe. He also proposed Strategic Arms Reduction Talks (START) to cut the number of missiles on both sides in half. The Soviets refused.

“Star Wars” Reagan disagreed with the military strategy known as nuclear deterrence, sometimes called “mutual assured destruction.” He knew that if nuclear war did begin, there would be no way to defend the United States. In March 1983, he proposed the Strategic Defense Initiative (SDI), nicknamed “Star Wars,” to develop weapons that could intercept incoming missiles.

A New Soviet Leader In 1985 Mikhail Gorbachev became the leader of the Soviet Union and agreed to resume arms-control talks. Gorbachev believed that the Soviet Union could not afford another arms race with the United States. Reagan and Gorbachev met in a series of summits. The first ended in a stalemate, as Gorbachev promised to cut back nuclear forces if Reagan gave up SDI, but Reagan refused. Reagan then challenged Gorbachev to make reforms. In West Berlin, Reagan stood at the Brandenburg Gate of the Berlin Wall—the symbol of divided Europe—and declared: “General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe . . . tear down this wall!”

Relations Improve In December 1987, the two leaders signed the Intermediate-Range Nuclear Forces (INF) Treaty. With an arms control deal in place, Gorbachev pushed ahead with economic and political reforms, which eventually led to the collapse of the Soviet Union. In the United States, the economy was booming, the military was strong, and relations with the Soviet Union rapidly improving as Ronald Reagan’s second term came to an end.

Reagan’s First Inaugural Address
"We have every right to dream heroic dreams. . . . You can see heroes every day going in and out of factory gates. Others, a handful in number, produce enough food to feed all of us. . . . You meet heroes across a counter. . . . There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth and opportunity. . . . Their patriotism is quiet but deep. Their values sustain our national life."

—Ronald Reagan, January 20, 1981

Reviewing Vocabulary


TEKS: 10B, 17C

Using Your Notes


Answering the Guiding Questions

TEKS: 10B, 24A

TEKS: 10B, 17C

TEKS: 10B, 17C

Writing Activity