AN AMERICAN LIFE November 15th, 1990

OVERVIEW: In An American Life, former president Ronald Reagan biographically details his life, from his years as a B-List movie star to the policy decisions he made while in the White House that halted the growth of government largesse and produced a new . ------FROM HUMBLE ROOTS: Born in Tampico, Illinois in February 6th, 1911, Ronald Reagan grew up a Democrat in a family of poor economic means. Coming of age during the Great Depression, Reagan used his charismatic personality to broadcast Chicago Cubs baseball games for WHO in Des Moines, Iowa post-graduation from Eureka College. However, he longed for something greater. Covering the Cubs during spring training in Los Angeles in 1937, he was discovered by Warner Brothers and signed to a multi-year contract. He appeared in over fifty films and was elected president of the Screen Actors Guild (SAG) in 1946. It was during his time with SAG that he officially converted from a Democrat to a Republican, particularly from his experiences fighting communist infiltration of Hollywood. With prodding from a Republican PAC coupled with his beliefs in individual rights and limited government, Reagan ran for in 1966 and defeated his opponent, Pat Brown. As governor, Reagan cut government spending and taxes, using open communication and compromise with both Democrats and Republicans alike. Further, he slashed many liberal social welfare programs that he believed the state government shouldn’t, and couldn’t, provide. A staple of his term consisted of his public addresses regarding policy, which were modeled after President Franklin Roosevelt’s fireside chats. In 1976, Reagan decided to run for the presidency. He challenged incumbent President Gerald Ford in the Republican primaries, and lost. He bounced right back in 1980, though, and took on liberal Republican George Bush in the primaries. He defeated Bush, and then offered him the vice presidential position on the Republican ticket. The two went on to defeat President (who had defeated Ford in 1976). In 1981, at the age of sixty-nine years, Reagan became the oldest man ever to be elected President. Reagan based his domestic policy on the principles of reducing the role of government and “”, the term given to his economic policies, which were based on the supply-side theories of economist Arthur Laffer. During the 1980 Republican primary race, Bush referred to this theory repeatedly as “voodoo economics”, contending that these policies would never function in the real economy. ------FOREIGN POLICY: When Reagan became President he had only one well-defined foreign policy goal: containing the Soviet NOTABLE QUOTES Union, or the “evil empire” as he once referred to it. He primarily wanted to stop the USSR from growing larger in regional ambition (as it tried to do when it invaded Afghanistan in 1979) and to keep other countries from falling prey to the “Government’s view of the economy Communist sphere of influence. He disliked the decade-long detente begun by President Nixon and continued by President could be summed in a few short Ford intended to ease relations with the Soviets. Reagan firmly believed that the USSR was using Détente and the SALT talks to take advantage of the United States. The “window of vulnerability” was fast approaching, Reagan insisted, when Moscow phrases: if it moves, tax it. If it keeps would be able to launch a preemptive first strike against Washington and decimate America’s nuclear defensive systems. moving, regulate it. And if it stops For this reason, Reagan reasoned that the U.S. needed to prepare its military defense systems for an onslaught. He believed that only through military preparedness could the world achieve a stable peace. During Reagan's two administrations, the moving, subsidize it.” ------U.S. military increased to unprecedented peacetime levels, spending heavily on production of nuclear arms and deploying them throughout the West. As an unintended consequence, such policy greatly increased the U.S. debt level in the 1980s. “We must reject the idea that every

The most notorious of the programs Reagan invested in was the Strategic Defense Initiative (SDI), more commonly known time a law’s broken, society is guilty as the Star Wars program. The SDI was designed to be a national defense network of missiles that could target and destroy rather than the lawbreaker. It is time any incoming enemy missiles before they reached the United States. However, much of the nation was divided on the exorbitant expense of such a program. However, those opposed were mollified as Reagan initiated START, or the Strategic to restore the American precept that Arms Reduction Talks, with the Soviet Union in mid-1982. However, these talks failed as the Russian leader of the time, each individual is accountable for his Leonid Brezhnev, refused to reduce Russia’s nuclear arsenal. Yet relations did begin to thaw in 1985 when Mikhail Gorbechev became the leader of the Soviet Union and actively sought both political and economic reform in the USSR. For actions.” the first time since the beginning of the , a Soviet leader approached the U.S. to seriously discuss peace. Five summits were held during Reagan’s second term between 1985 and 1988, beginning in Geneva, Switzerland. Many concessions were made on both sides: in 1987 Gorbechev agreed to withdraw most of its nuclear arsenal and troops from the Soviet-controlled states in Eastern Europe and to withdraw from Afghanistan, while Reagan abandoned his Star Wars plans and agreed to reduce the number of U.S. nuclear weapons. Having spent heavily into debt coupled with new economic reforms, the USSR collapsed in 1991, disintegrating into various states and ending the Cold War.

Despite America's blossoming relationship with Soviet Russia during Reagan's second term, the President still had to deal with many issues elsewhere in the world, namely in the Middle East and Latin America. In the 1980s, U.S. relations with many states in the Middle East were contentious at best, primarily because the US continued to pledge support for the nascent Jewish state of Israel at the expense of the many Muslim Palestinians living in the region. Almost every other Middle Eastern state opposed the existence of Israel and supported the Palestinian Liberation Organization, or PLO, headed by Yasir Arafat. When Israel attacked the PLO headquarters in Beirut, Lebanon, in 1982, Reagan dispatched several thousand U.S. Marines to the country to serve as peacekeepers. In retaliation, a pro-Palestinian suicide terrorist bombed the U.S. Embassy in Beirut and killed 239 Marines. To Reagan’s admission, the U.S. had little understanding or comprehension to the cultural ideology of the Middle East and the long-held stakes within territory and tangled religious identities. A few weeks after the bombing, the U.S. pulled out of Beirut.

The Reagan administration also became heavily committed in various hotspots throughout Latin America, particularly in those areas where the fight against Communism still raged. In one notable instance, Reagan sent U.S. troops to the island of Grenada in 1982 to save 800 medical students as intelligence reports of the time claimed a Cuban led uprising to overthrow the government and establish a communist state was imminent. The conflict lasted only a few hours. Despite the mission remaining secretive prior to commencing, the American public strongly approved of Reagan’s decision to send in the Army upon learning of it and its success. Conversely, Margaret Thatcher, Prime Minister of England, disapproved since Grenada was a commonwealth of Britain.

Reagan's primary concern in Latin America, though, was Nicaragua. In 1979, President Carter had supported the Socialist Sandinista movement when it overthrew Nicaragua's dictator. Reagan, however, vehemently opposed the Sandinistas’ claim to power and the organization's Communist ties. In 1981, Reagan authorized the CIA to train an army of 10,000 Nicaraguan “freedom fighters,” or , to fight the Sandinistas. Congress quickly became outraged and worried that Reagan might inadvertently lead the U.S. into another Vietnam type of conflict. In turn, Congress passed the Boland Amendment to ban U.S. assistance to the Contras for the next several years. Nevertheless, the Reagan administration ignored the order and covertly continued to support the Nicaraguan Contras. The U.S. Navy mined the harbors surrounding Nicaragua and destroyed the nation’s oil reserves. The administration ordered Lieutenant Colonel to continue secret fundraising efforts to help the Contras. Over $30 million was sent into the country. Ironically, a large portion of that money actually came from , one of the U.S.’s most dangerous enemies. What later became known to the public was that North agreed to sell Iran millions of dollars of weapons in exchange for the release of hostages held in Lebanon by Iranian agents. ------DOMESTIC POLICY: On March 30th, 1981, Reagan was shot underneath his arm by a man outside the Washington Hilton Hotel named John Hinckley. As is noted by Reagan, Hinckley had tried to assassinate him in order to impress actress Jodie Foster, not for political reasons. Reagan survived the near fatal experience and returned to the Oval Office even more popular than ever before.

Based on supply-side economics, Reagan implemented his economic policies in 1981. The four pillars of the policies were as follows: to reduce marginal tax rates on income from labor and capital; reduce regulation; tighten the money supply to reduce inflation; and reduce the growth of government spending. By reducing or eliminating decades-long social programs while concurrently lowering taxes and marginal tax rates, Reagan's approach to handling the economy marked a significant departure from that of many of his predecessor's Keynesian policies of the previous two decades. Milton Friedman, the monetarist economist who was an intellectual architect of free-market policies, was a primary influence and architect of Reagan’s economic policies.

When Reagan entered office, the country faced the highest rate of inflation since 1947 (average annual rate of 13.5% in 1980), and interest rates as high as 13% (the Fed funds rate in Dec. 1980). These were considered the nation's principal economic problems and were all considered components of stagflation. Reagan sought to stimulate the economy with large, across-the-board tax cuts. The expansionary fiscal policies soon became known as "Reaganomics,” and were considered by some to be the most serious attempt to change the course of U.S. economic policy of any administration since FDR’s New Deal. His radical tax reforms, in combination with a curb on domestic social spending, harsh restraints applied by Paul Volcker at the Federal Reserve on the nation's money supply, and heavy military expenditures produced significant economic expansion and reduced inflation. (Inflation reached a low of 1.9% in 1986.) These policies were labeled by some as “Trickle-down Economics,” though it is argued that the combination of significant tax cuts and a massive increase in Cold War related defense spending resulted in large budget deficits and an expansion in the U.S. trade deficit. Furthermore, it may have fueled the stock market crash of 1987 while also contributing to the Savings and Loan Crisis. In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $997 billion to $2.85 trillion and, in turn, initiating the country to transition from being the world’s largest international creditor to the world's largest debtor nation. In his writing, Reagan described the new debt creation as the “greatest disappointment” of his presidency.

Reagan's support for an increased defense budget at the height of the Cold War was supported by both Congressional Democrats and Republicans alike. However, Congress was reluctant to follow Reagan's proposed cuts in domestic programs. In accordance with Reagan's less-government intervention views, many domestic government programs were cut or experienced periods of reduced funding during his presidency. These included Social Security, Medicaid, Food Stamps, and federal education programs. Funding for government organizations, including the EPA, were also reduced. However, tax breaks and increased military spending resulted in an increase of the national budget deficit and led Reagan and Congress to approve two tax increases, aiming to preserve funding for Social Security, though not as high as where marginal rates stood prior to the 1981 tax cuts.