AP Success - AP U.S. Gov & Pol: Concept Application: Reagan, Media, and Presidential Powers

Stagflation, a time of high unemployment and high inflation, affected the United States throughout the 1970s. When President Ronald Reagan entered office in 1981, he set out to lower tax rates and deregulate the economy. Many of these proposals involved rolling back regulations set in place after the Great Depression. 

Only July 27, 1981, President Reagan took his plan to the American people in the form of a televised address from the Oval Office. In his speech, he stated, “For 19 out of the last 20 years, the Federal Government has spent more than it took in. . . .And starting next year, the deficits will get smaller until in just a few years the budget can be balanced. And we hope we can begin whittling at that almost $1 trillion debt that hangs over the future of our children.” 

Reagan’s speech to the nation helped convince conservative Democrats in Congress to support the Economic Recovery Tax Act of 1981. Among other things, the law lowered taxes for high-income Americans and allowed taxpayers to create Individual Retirement Accounts (IRAs).