How Did Ronald Reagan Improve The Economy

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In the late 1970s and early 1980s, the United States faced an economic recession with high unemployment rate and inflation, and energy shortage in various part of the country. Iran, the major oil supplier to the US, experienced an uprising in which the Muslim religious leader Ayatollah Khomeini overthrew the shah of Inaq. The US supported the Shah, which cause the militants in Iran to attack the US embassy and took 52 American hostages. The militants demanded the US to sent the Shah back to Iran. President Jimmy Carter failed to free the American hostages. Also, The Cold War showed no sign of warming and the American anti-communism tension in the nation kept raising. Ronald Reagan ran against President Carter in the 1981 election with his vice president nominee George H.W. Bush. Reagan defeated …show more content…
Another controversy was that Reagan’s administration secretly sold weapons to Iran in exchange for the release of seven American hostages. Ronald Reagan’s presidency was successful.

The first reason why Reagan’s presidency was successful was he improved the economy by reducing income tax rates. Reagan signed the Economic Recovery Tax Act on August 13, 1981. The ERTA reduced individual tax by 23 percent over a three years period, lowered the top marginal tax bracket from 70% to 50% and the lowest bracket from 14% to 11%. Reagan addressed his plan for reducing taxes in his acceptance speech in at the Republican National Convention in Detroit on July 17, 1980. “I have long advocated a 30 percent reduction in income tax rates over a period of three years. This phased tax reduction would begin with a 10 percent "down payment" tax cut in 1981, which the Republicans and Congress and I have already proposed.” This showed Reagan’s presidency was successful because lowing the tax rate allowed people to save more money and have more money to spend. When the flow of consumer demand increased, the
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