Ronald Reagan v. Lyndon B. Johnson: Contrasting Domestic Policies - Essay Sample

Introduction

The two presidents, Ronald Reagan and Lyndon B. Johnson had different contrasting and similar philosophies on the role government to domestic affairs. Their domestic policies varied widely because Johnson was a liberalist while Regan was a conservative. Johnson concentrated on maximizing the role of government while Regan states spending on social programs. Johnson believed that the role of Congress is to promote public wellbeing; hence he formed a different committee to come up with ways to develop the society. He sent several bills to congress and they became the "Great Society" initiatives. The purposes of these programs were to reduce poverty and improve the lives of the people especially the elderly and the poor. On the contrary, Reagan viewed War on Poverty as an ineffective way of developing the economy and suggested a reduction of government spending to the public. Low taxation was another way Reagan used to promote economic growth by increasing their purchasing power. Moreover, Reagan proposed the expansion of military size and capabilities to secure the nation from external attacks. However, they had similar goals such as economic development and poverty reduction. Although the objective of the presidents Reagan and Johnson was to promote economic growth they introduced different strategies. Johnson introduced the great society programs while Reagan introduced domestic policies. The purpose of the paper is to comparisons of Lyndon b. Johnson's great society agenda and Ronald Reagan's domestic policies. The paper will be subdivided into several sections. The first section will introduce the great society programs and the domestic policies developed by Reagan.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The Introduction of Great Society and Reagan Domestic Policies

The Great Society was a series of domestic initiatives and legislation proposed by President Johnson in 1964. The main objectives of the Great Society programs were to end poverty, abolish inequality, environmental conservation, crime reduction, and elimination of racial injustice. These programs also aimed at helping the spoor by increasing government spending in social amenities such as transportation, education, rural issues, and healthcare. Most of these programs were proposed by John Kennedy and Johnson took them after the assassination that left many Americans startled. He was helped by several democrats but eventually, it was rejected by the anti-war because they believed that the program was spending too much of the Vietnam War. However, some initiatives such as the Older Americans Act, Medicare, and Medicaid, and funding education exist to date. On the other hand, President Reagan's domestic policies were economic strategies to achieve growth and development of the economy. They were implemented in the 1980s and include the reduction of government spending on social programs. He concentrated on a tax cut to promote personal welfare because he believed that the government cannot solve the needs of everyone. He also introduced the soviet strategy where he wanted the United States to be a superpower. To achieve the dream, Reagan had to increase military expenditure to protect the country and also fight international warfare. He lowered the rate of taxes to 28%, which is the lowest since 1931. However, Reagan increased non-income tax to maintain economic reforms introduced during his presidency. Regan's domestic policies aimed at encouraging private investment and reduction of public funding. Johnson believed that the government should set up companies to improve the role of employment but Reagan encourages private investment.

The Great Society War on Poverty

The great society focused greatly on the eradication of poverty in America. Kennedy's administration had laid out several programs that can be used to eradicate poverty. Johnson was also part of this administration and when he was sworn into power, he focused on eliminating unemployment, hunger, and illiteracy. He believed that these three issues were the main contributors to poverty among the people. To achieve War on Poverty he formed the Economic Opportunity Act (EOA) that lead to the creation of an Office Economic Opportunity (OEO). The office comprised of experts who proposed several community-based initiatives to reduce poverty. Johnson intended to help the poor by developing their skills for employment.

The Great Society on Education

The government spends almost $3 billion providing educational schemes and employments in rural areas. The Economic Opportunity Act of 1964 provided several methods, for instance, books, job training, and higher education and transport fee to schools. The government also funded the rebuilding and clearance of towns to improve their appearance. The OEO developed the best methods of eradicating poverty by equipping people with skills that will help them find employment. They reflected on the approaches that not only raises the income of the poor but equip them for the job market. Another War on Poverty initiatives was the Community Action program aimed to improve the community and provide jobs to the rural residents. The government would also recruit and train a volunteer to help the offer skills to poor communities. Loans and grants were provided to employers and company owners to offer jobs to the unemployed. Farmers were also viewed as significant players in the war on poverty. The government gave them funds to buy land and crops to establish plantations that would employ others and earn them income. Project Head Start gave women the chance to enter the workplace by offering pre-school education to their children. Women who stayed at home looking after the children had an opportunity to acquire marketable skills and later employment.

Tax Reduction as a Domestic Policy to Promote Economic Growth

Reagan opposed the war on poverty programs and blamed them for low economic growth in America. He implemented four domestic policies that were founded on supply-side economics. These policies include reduction of the marginal tax rates, reduce government spending. Reduce regulation to allow the free market to take place and reduce the money supply to control inflation. When he was elected in 1981, he cut down marginal taxes and also cut budget to stimulate economic growth. In 1982, he increased the tax after realizing that there was a huge budget deficit. He introduced the Tax Equity and Fiscal Responsibility Act (TEFRA) and it became a law after the congress' approval. In his second term, he introduced another policy. Reduction tax rates on labor and capital income when he signed the Tax Reform Act of 1986. He eliminated the 'great society' programs which increased the money supply to communities. Reagan's policies were influenced by John Keynes and Milton Friedman. He reduced government spending on social programs to reduce the level of inflation. Privatization was another method he used to create employment by paying contractors to perform the work of the government.

Impact of Reagan Policies on Inflation, Unemployment and Economic development

Reagan became the president when the economy was experiencing high rates of inflation. The rate of inflation was 13.5 % in 1980 and therefore he had to discover strategies through which he could bring it down and achieve economic development altogether. The interest rate was at 13% resulting in stagflation in the economy. Reagan used the expansionary fiscal policies to change the state of the economy and he was helped by a few economists such as Paul Volcker. He was the first president to apply these policies and they became a turning point for the country.

Reagan's administration achieved economic boom because he combined several policies such as drastic tax reforms, reduced social expenditure, and restraints money supply. However, the country could not maintain its budget and to finance the deficit, the government borrowed heavily both from domestic and international lenders. These policies reduced the level of inflation to 1.9% in 1986. The level of unemployment reduced to 5.3 % in 1988 from 10% in 1982. The reduction was realized because most people applied to do contract jobs that were previously carried out by the government. When Reagan took office the level of unemployment was 10% hence his policies were more effective in poverty compared to Johnson's "great society" programs of increasing government spending. An increase in government spending increases the levels of inflation due to increased demand. An increase in inflation harms employment. Inflation causes the costs of goods to increase and demands fall. When the demand for commodities decreases due to an increase in the cost of production demand for labor also decreases and companies lay off workers. Phillips curve also shows the relationship between inflation and unemployment because labor is a derived demand. As inflation increases, the level of employment decreases. An increase in Inflation causes many citizens in the United States to be jobless and their standards of living deteriorate because they do not have income. When people lack a source of income, poverty increases as people do not have money to purchase goods and services they require to survive. The per capita income of the country also decreases which decreases their purchasing power.

The Gross Domestic Product of the country also grew tremendously during Reagan's presidency. Johnson's program also included policies such as tax cuts to promoted economic growth. Johnson attained the office when the economy was growing rapidly due to the old new deal initiatives. Kennedy had proposed a 20% tax cut on marginal income to reduce it from 91 to 71 percent. After his death, Johnson implemented the tax cut in 1964 which reduced the rate of tax on low-income individuals and institutions. The GDP of the economy grew by 10% in 1966 as a result of the tax cut. Johnson's tax cut policy can be described as the greatest approach that caused economic growth in the postwar years. Moreover, the GNP rose from 7% in 1964 to 9% in 1966. Johnson's policy to equip people with marketable skills reduced the level of unemployment by 5% in 1966. The number of people earning more than $7,000 per year increased from 22% in 1950 to 55% in 1966.

Free Markets

Reagan focused on deregulation to allow free markets to determine the prices of commodities including oil. He entered the office when government regulations had affected domestic businesses and private industries. Reagan believed that regulations were hindering private investment in the country. His success was achieved through low regulations by slowing their promulgation or withdrawing bureaucracy. The oil industry was the most affected by price controls and Reagan reversed it immediately he entered the office. Price controls on oil had caused the 1973 and 1979 oil crisis. He introduced a solution to fuel shortages that had become a major problem in the 1970s. He also introduced the "Windfall Profit Tax" that aimed at promoting domestic oil production. In 1988, Congress passed the law after they realized that the country was depending on foreign oil. Importing oil is expensive hence the government introduces the excise tax to discourage its importation. This policy increased fuel efficiency in vehicles improved compared to the last decades. The prices of fuel have been down since then although the government continues to oversee the prices to minimize consumers' manipulation. Reagan also signed an agreement with Japan reduced the number of imported cars to the United States to promote the domestic market. The agreement stated that only one in four vehicles sold in the United States should be imported. This policy promoted domestic...