Editing Reaganomics (section)

===Overview===
[[File:Annual percent change in real GDP 1973-1988.png|450px|thumb|right|Annual percent change in real gross domestic product — 1972 through 1988 (Reagan years in red)]]

Spending during the years Reagan budgeted (FY 1982–89) averaged 21.6% GDP, roughly tied with president Obama, but lagging behind President Trump's 38.2%,<ref>{{Cite web |date=2025-01-15 |title=National Accounts: GDP by Expenditure: Constant Prices: Gross Domestic Product: Total for United States |url=https://fred.stlouisfed.org/series/USAGDPRQPSMEI |access-date=2025-01-22 |website=fred.stlouisfed.org |language=en}}</ref> though much of that was due to the Covid-19 pandemic. Both Obama and Reagan faced a severe recession early in their administration. In addition, the [[public debt]] rose from 26% GDP in 1980 to 41% GDP by 1988. In dollar terms, the public debt rose from $712 billion in 1980 to $2.052 trillion in 1988, a roughly three-fold increase.<ref name="CBO Historical Tables"/>{{RP|143}}  The unemployment rate fell from 7% in 1980, to 5% in 1988. The inflation rate declined from 10% in 1980 to 4% in 1988.<ref name="nisk_concise"/>

Some economists have stated that Reagan's policies were an important part of bringing about the third longest peacetime economic expansion in U.S. history.<ref name=nationalreview>{{cite news |title=Debt, Lies, and Inflation |author=Paul Craig Roberts |url=http://old.nationalreview.com/reagan/roberts200406101413.asp |newspaper=National Review |date=August 31, 1992 |access-date=February 27, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20110424073621/http://old.nationalreview.com/reagan/roberts200406101413.asp |archive-date=April 24, 2011 |author-link=Paul Craig Roberts }}</ref><ref name="Gardner">{{cite journal |last1=Gardner |first1=Jennifer M. |year=1994 |title=The 1990–1991 Recession: How Bad was the Labor Market? |journal=Monthly Labor Review |volume=117 |issue=6 |pages=3–11 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |url=http://www.bls.gov/opub/mlr/1994/06/art1full.pdf |access-date=April 6, 2011 |archive-date=October 21, 2011 |archive-url=https://web.archive.org/web/20111021172340/http://bls.gov/opub/mlr/1994/06/art1full.pdf |url-status=live }}</ref> <!-- Though other economists argue the longer 1990s expansion begun under [[George H.W. Bush]] in 1991 occurred after an [[George H. W. Bush#Economy|increase in tax rates]] by Congress in November 1990, continuing through the Clinton administration, resulting in a 4.2% decrease in unemployment.<ref name="U.S. Department of Labor: Bureau of Labor Statistics via The Federal Reserve Bank of St. Louis">{{cite web |url=http://research.stlouisfed.org/fred2/data/UNRATE.txt |title=Civilian Unemployment Rate |date=August 3, 2012 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012}}</ref>  CLARIFICATION NEEDED: How are these numbers being calculated? E.g. looking at the reference, we see monthly unemployment numbers. From what date to what date is the 4.2%/42% decrease being calculated. --> During the Reagan administration, real GDP growth averaged 3.5%, compared to 2.9% during the preceding eight years.<ref>{{cite web |url=https://www.bea.gov/national/xls/gdpchg.xls |title=Gross Domestic Product |date=July 27, 2012 |publisher=Bureau of Economic Analysis |format=Microsoft Excel spreadsheet |access-date=August 15, 2012 |archive-date=August 14, 2018 |archive-url=https://web.archive.org/web/20180814045606/https://www.bea.gov/national/xls/gdpchg.xls |url-status=dead }}</ref>{{additional citations needed|date=April 2025}} The annual average unemployment rate declined by 1.7 percentage points, from 7.2% in 1980 to 5.5% in 1988, after it had increased by 1.6 percentage points over the preceding eight years.<ref name="U.S. Department of Labor: Bureau of Labor Statistics via The Federal Reserve Bank of St. Louis">{{cite web |url=http://research.stlouisfed.org/fred2/data/UNRATE.txt |title=Civilian Unemployment Rate |date=August 3, 2012 |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012 |archive-date=September 2, 2011 |archive-url=https://web.archive.org/web/20110902151143/http://research.stlouisfed.org/fred2/data/UNRATE.txt |url-status=live }}</ref><ref>{{cite web |url=http://www.bls.gov/cps/cpsaat01.htm |title=Labor Force Statistics from the Current Population Survey: Employment status of the civilian noninstitutional population, 1941 to date |publisher=U.S. Department of Labor: Bureau of Labor Statistics |access-date=August 12, 2012 |archive-date=August 21, 2012 |archive-url=https://web.archive.org/web/20120821061545/http://www.bls.gov/cps/cpsaat01.htm |url-status=live }}</ref>  Nonfarm employment increased by 16.1 million during Reagan's presidency, compared to 15.4 million during the preceding eight years,<ref>{{cite web|url=https://fred.stlouisfed.org/graph/?g=k9tV|title=All Employees: Total Nonfarm Payrolls|date=June 1, 2018|access-date=June 12, 2018|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612210716/https://fred.stlouisfed.org/graph/?g=k9tV|url-status=live}}</ref> while manufacturing employment declined by 582,000 after rising 363,000 during the preceding eight years.<ref>{{cite web |url=https://fred.stlouisfed.org/series/MANEMP|title=All Employees: Manufacturing|date=June 1, 2018|access-date=June 13, 2018|archive-date=March 14, 2021|archive-url=https://web.archive.org/web/20210314155456/https://fred.stlouisfed.org/series/MANEMP|url-status=live}}</ref> Reagan's administration is the only one not to have raised the minimum wage.<ref>{{cite web |url=http://www.dol.gov/whd/minwage/chart.htm |title=History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938–2009 |publisher=United States Department of Labor: Wage and Hour Division (WHD) |access-date=December 27, 2009 |archive-date=November 21, 2019 |archive-url=https://web.archive.org/web/20191121102637/http://www.dol.gov/whd/minwage/chart.htm |url-status=live }}</ref>  The inflation rate, 13.5% in 1980, fell to 4.1% in 1988, in part because the [[Federal Reserve]] increased interest rates (prime rate peaking at 20.5% in August 1981<ref>{{cite web |url=https://fred.stlouisfed.org/series/MPRIME|title=Bank Prime Loan Rate|date=June 1, 2018|access-date=June 13, 2018}}</ref>).<ref>{{cite web |url=https://fred.stlouisfed.org/graph/?g=ipl2|title=Consumer Price Index for All Urban Consumers: All Items|date=June 12, 2018|access-date=June 13, 2018|archive-date=August 5, 2020|archive-url=https://web.archive.org/web/20200805050150/https://fred.stlouisfed.org/graph/?g=ipl2|url-status=live}}</ref><ref>{{Cite web|url=https://www.federalreservehistory.org/essays/great-inflation|title=The Great Inflation &#124; Federal Reserve History|website=www.federalreservehistory.org|access-date=October 18, 2022|archive-date=October 18, 2022|archive-url=https://web.archive.org/web/20221018191653/https://www.federalreservehistory.org/essays/great-inflation|url-status=live}}</ref>  The latter contributed to a recession from July 1981 to November 1982 during which unemployment rose to 9.7% and GDP fell by 1.9%. Additionally, income growth slowed for middle- and lower-class (2.4% to 1.8%) and rose for the upper-class (2.2% to 4.83%).<ref>{{cite web|url=http://www.taxhistory.org/www/features.nsf/Articles/2BEBD14445F182F1852579F10058AA9F?OpenDocument|title=Tax Analysts -- Reaganomics -- A Report Card|website=www.taxhistory.org|access-date=June 12, 2018|archive-date=March 17, 2018|archive-url=https://web.archive.org/web/20180317102840/http://www.taxhistory.org/www/features.nsf/Articles/2BEBD14445F182F1852579F10058AA9F?OpenDocument|url-status=live}}</ref>

The [[misery index (economics)|misery index]], defined as the [[inflation rate]] added to the [[unemployment rate]], shrank from 19.33 when he began his administration to 9.72 when he left, the greatest improvement record for a President since [[Harry S. Truman]] left office.<ref>{{cite web|url=http://www.miseryindex.us/indexbyPresident.aspx|title=US Misery Index - Index by President|website=www.miseryindex.us|access-date=June 12, 2018|archive-date=February 14, 2015|archive-url=https://web.archive.org/web/20150214232054/http://miseryindex.us/indexbyPresident.aspx|url-status=live}}</ref> In terms of American households, the percentage of total households making less than $10,000 a year (in real 2007 dollars) shrank from 8.8% in 1980 to 8.3% in 1988 while the percentage of households making over $75,000 went from 20.2% to 25.7% during that period, both signs of progress.<ref>"Income, Poverty, and Health Insurance Coverage in the United States: 2007" by the Census Bureau, https://www.census.gov/prod/2008pubs/p60-235.pdf {{Webarchive|url=https://web.archive.org/web/20210126133037/https://www.census.gov/prod/2008pubs/p60-235.pdf |date=January 26, 2021 }} (Table A-1 on p. 27)</ref>