Chapter 19 Short Answer Essays
In 2001, President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA). This bill called for large tax cuts just as the Economic Recovery Act of 1981
had and largely benefited the wealthiest Americans. President Bush’s approach to economics was
very similar to that of President Reagan’s. Explain the assumptions behind the theory of supplyside economics, and describe the consequences of Reaganomics.
1. Supply-side economics is based on the idea that if people have more money in their hands, they
will be able to spend, save, and invest more.
2. Reagan and Bush both believed that cutting taxes would encourage people to work more to make
more of their own money, which they would then put back into the economy through consumer
spending.
3. They also believed that by reducing the taxes of the wealthiest Americans, they would encourage
these people to invest more in business and industry, which would generate more jobs and
increase the prosperity of all Americans.
4. Unfortunately, Reaganomics had other effects. An economic recession set in, causing high
unemployment that hit blue-collar workers and farmers especially hard.
5. A year later the economy started to recover, but the disparity in the tax cuts caused greater wealth
disparity as wealthy people became wealthier and poor people became poorer.
6. The tax savings gained by wealthy Americans did not reach the rest of the nation.
7. Also, Reagan encouraged Congress to cut social spending to balance the tax cuts, but he also
urged Congress to increase defense spending, which caused the budget deficit and the national
debt to soar.
Describe the growth of the conservative movement in the United States during the 1970s.
1. The conservative movement grew throughout the 1970s, and culminated in Republican Ronald
Reagan’s election as president in 1980.
2. The conservatives gained ground as people lost confidence in the federal government.
3. The New Right combined the conservative interests of several groups, and appealed to voters to
reform economic policies, to promote traditional Christian values, and to fight communism.
4. The new conservatives criticized liberal policies for causing stagflation, making unfunded
mandates, and creating a welfare society that lacked accountability.
5. Religious groups also became more involved in politics and drew voters to conservative causes.
6. One group, the Moral Majority worked against Supreme Court decisions that prohibited religious
education in schools and protected a woman’s right to abortion.
7. They also spoke out against the Equal Rights Amendment and homosexuality. These positions
appealed to many Americans.
8. In addition, Republicans gained votes through shifts in demographics and population trends. As
more people moved from cities to suburbs, they changed their party affiliation to reflect new
economic interests.
9. Republicans also benefited when many white southerners shifted their party allegiance in
response to the civil rights policies of the Democrats.