During the early 1980s the Banks started to make risky loans to people who couldn't pay them back.
So the money the Banks took out were from bank accounts of American citizens
When the Americans asked for their money from their accounts the bank said we don't have it and that caused several banks to close or fail.
Even though the money is reimbursed by the FDIC it is taking money out of the governments money and increasing the national debt.
This became known as the Savings and Loans Scandal, or S&L for short.
Unemployment rose from 6.9 in April% 1980 to 7.5% in May 1980
Inflation was at 11.3% in 1979 but increased to 13.5% in 1980
Unemployment caused a staggering 10.8% to become unemployed or roughly 12 million people in 1982
Housing, steel manufactures and automobile makers suffered the most and made large job cuts
As a family decreases in income they start to think more cautiously of how and when to use their money.
This causes less money to be put back into the economy which causes it to become weak
President Reagan believed in supply side economics, like its name states, favors increasing supplies and lowering taxes.
Reaganomics was a term used to describe Reagan's belief in supply side economics with an emphasis on large tax cuts to start the process.
Lower taxes/Cut Government Taxes (business taxes)
Businesses as a result will have more money
Reinvest in their own Businesses (expand)
Money is spent
Cycles back up to step five
Trickle Down Economics and Prime to Pump were two theories within supply side economics.
Trickle Down Economics is a theory that shows if you lift high taxes off of businesses it will cause a "Trickle Down" effect that will spread the wealth down to the lower classes, as a result from the businesses spending into the economy.
Prime Pumping was a theory that if the government spent money into US made goods it would cause a boost into the economy.
The problem with these two theories
is that many people questioned if they
would ever work and that they have
never been endorsed by Reagan.
In 1981 Reagan signed an act that reduced tax rates by 23% for an individual
This act cut top rates down to 50% from 70%
Supporters of President Reagan claimed he caused an economic expansion and the tax cuts he made caused government revenue to increase.
Critics of the tax cuts claimed that the economy grew by no help from the tax cuts even though there were more tax money in Americans' hands.
Critics also proclaimed
that if the Act didn't pass
the economy could have
grew even more from the
In 1986 President Reagan drastically cut down tax rates from 50% to 28%
Reagan thought it would get American citizens to pay for their taxes rather than going through the trouble of evading them while taking risks, these were also known as tax shelters.
The Tax Reform was said to "simplify the income tax code."
A widely popular explanation to why the market crashed was because of program traders but also included “over valuation,” “illiquidity,” and “market psychology.”
First the crash started in Hong Kong then migrated to Europe and finally the United States, while hitting any countries in between.
The crash caused large declines in stock markets around the world, New Zealand being the hardest hit by falling about 60%.
In the 1980’s aids appeared in the United States. It’s believed that the disease came from an infected Haitian immigrant.
Aids is an infection that slowly and progressively weakens the cellular immune system.
At first the disease was seen only within the gay community and with drug users.
Americans did not react to the disease until cases began to appear with people who received contaminated blood transfusions.
Ryan White became the face of aids outside of the gay community. He was a hemophiliac who received regular blood transfusions. He was healthy most of his childhood until he got pneumonia in 1984. When admitted to the hospital he learned he had aids.
He was believed to only have a few months to live but his T-cell count raised and he began to feel better and desired returning to school.
Few people in White’s hometown understood the disease and many reacted negatively towards Ryan. After a legal battle to get him back into school he had few friends and was very unhappy. People went far as to shoot a bullet through his living room window. His family then moved to Cicero, Indiana to a school where the students had previously been educated about aids.
White’s struggle was highly televised and made him the poster boy for aids. He had many celebrity friends and enjoyed life in Cicero.
Unfortunately White lost his battle against aids in April of 1990 but he left behind a better understanding to the public about the disease.
The phrase “Just say no” came from Nancy Reagan.
The first lady was at an elementary school in California and she was asked what to say if she was offered drugs. Nancy Reagan replied “Just say no,” and that’s how her anti drug campaign started.
“ Just say no” isn’t against only drugs, it also is saying no to violence and premarital sex.
During Ronald Reagan’s presidency, drug abuse reduced significantly.
High school students use of marijuana dropped from 51% in 1978 to 36% in 1987.
Yuppie is an acronym used to describe young urban professionals.
The yuppie was usually a person who lived in a big city, was ambitious, selfish, successful, materialistic, and self indulgent.
During the beginning of the 1980s yuppies were known to abuse cocaine because it was expensive and, “God’s way of showing you were making too much money.” (Robin Williams)
They tended to be single and spend their money on expensive toys such as Rolex watches, designer fashions, trendy gourmet food, and BMW cars.
Regan believed that the Soviets were an “evil empire.”
Reagan favored defense budget to strengthen the military.
So Over a five – year period, the US spent $1.1 trillion on defense, Many want to new weapons and new technology.
U.S created many new missiles.
Reagan announced the Strategic Defense Initiative know as the Star Wars. SDI was proposed the creation of massive satellite shield in space to intercept and destroy incoming Soviet missiles.
In 1983 the United States invaded the island of Grenada and Overthrew the communist government.
They remained there for free election.
General Qaddafi sponsored terrorist attacks on the Americans and Israeli in Europe.
One of the incidents were a bombing in West Berlin in which one of the American serviceman was killed.
Reagan ordered air attacks on
Libya on April 14, 1986.
In El Salvador, The United States supported the El Salvador military by supplying them weapons, money and more..
They trained the military to fight the guerrillas, some of whom were Marxists.
Regan increased military aid to El Salvador about $ 1 million a day.
In Nicaragua the Marxist government ruled.
Reagan was afraid that the Marxist were going to spread communism to Latin Americans countries.
In 1984 the congress discovered about the secret mission and banned military aid to the Contras
Therefore, Reagan administration sold arms to the Iran and supplied to the Contras to keep fighting against the Marxist.
In 1989, Chinese students gathered in the capital, Beijing, to march for democracy and reform.
In May, protesters occupied Tiananmen Square in the heart of city, even though the officials told them to leave.
The numbers grew and there were more than 1 million people across the city.
On June 3, China’s leader ordered the army to attack the protester. More than thousand of people died and many ran away.
President Bush looked forward to make better relation with China. Instead of attacking the leader and putting the whole world under crisis.
He talked quietly and encourage trade between U.S.A and China.
Bush suspected General Manuel Noriega, Panama’s dictator, of smuggling cocaine into the U.S
Noriega declared war on the U.S. Therefore, Bush answered back by launching a lightning attack against Panama in December 1989 and invaded Panama.
Noriega surrendered to American forces and later was found guilty.
During the 80’s fashion was a way for people to express their individuality.
Women’s fashion in the 80’s consisted of a lot of neon colored clothing. Things like off the shoulder shirts, long shirts, mini skirts, thick wasted belts, leg warmers, tight washed jeans, zippered leggings, scrunched socks, exercise gear, and spandex were worn.
Men in the 80’s could be seen wearing rock band shirts, ocean pacific t-shirts, leather or jean jackets, sleeveless shirts that showed off their muscles, tight leather pants, spandex, and parachute pants.
Hair: Hair was an important feature to a lot of people living in the 80’s. The way you styled your hair could distinguish you from others.
Airhead - A stupid person:
Awesome - Something awful, or appalling
Eat my shorts - A comeback to someone who just insulted you
Gal pal - someone’s boyfriend or girlfriend
Have a cow - get over excited about something
The eighties were the decade of fads some of them being
Boom Boxes - Everyone's traveling speakers that became known as the “ ghetto blaster”
Rubik Cube- The impossible toy to solve without cheating
Video Arcades_ The arcades were the “ in” places to hangout on the weekends.
Pop Rocks – the candy that kids loved because it made noise.