Changes

===Economy===

===Economy===

Reaganomics (or supply side economics) was almost a total reversal of the Keynesian (or demand side) economics of the post-World War II American economic policy. Instead of adding money to the economy to stimulate demand, Reagan's policy was to cut taxes on the supply side of the economy, thus encouraging "productive behaviors." It is based on the theory of the Laffer Curve, that there was an optimal tax rate that brought in the highest revenue without stifling the economy. Through lower taxes, economic growth would pay for the decrease in tax rates. However, because the lowering taxes inserts more money into the economy, inflation rises. To combat this side-effect, Reagon's administration raised interest rates, thereby taking money out of the economy that it just inserted into the economy.

Fueled by an over spending Congress that steadfastly refused Reagan's budget proposals, the national debt increased 160% during his two terms in office. The economic growth that resulted from tax cuts made deficits as a percentage of GDP lower than what they had been in during the previous decade of stagflation.

 

The consequences of Reaganomics were less than idea. The deficit ballooned due to a lack of growth compared to predictions (the predicted growth was 10 times the actual growth). This was exacerbated by the unprecedented peacetime increase in military spending. Also,the increased interest rates kept adding to the already massive debt. Average personal debt doubled. The percentage of the GDP devoted to debt increased from 18% to 38% over the course of his presidency.  

 

The tax cuts further concentrated wealth at the top tier of the economy, that is to say, the wealthiest 5% took the vast majority of benefit from that growth. The total share of the economy that the top decile held was grew from 33% to 38% over the course of Reagan's two terms. The top .01% share of the economy grew from .7% to 1.75%.

===Foreign policy===

===Foreign policy===