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What economic problems was America facing in the 1970’s?

What economic problems was America facing in the 1970’s?. How can the government help get us out of a problem like this?. Wonka Chocolate Company. Who would like to be Willy Wonka ? Oompa Loompas You will cut out one Wonka Bar at a time and deliver it to the customers

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What economic problems was America facing in the 1970’s?

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  1. What economic problems was America facing in the 1970’s? How can the government help get us out of a problem like this?

  2. Wonka Chocolate Company • Who would like to be Willy Wonka? • OompaLoompas • You will cut out one Wonka Bar at a time and deliver it to the customers • You need to complete your deliveries by the end of the song

  3. “Reaganomics” Also known as “Supply-Side Economics”

  4. The Tax Problem • Wealthy people run or own some of the largest businesses/corporations in our country • High taxes on wealthy people/corporations keeps them from being able to: • Pay their workers more • Expand their business to hire more workers • If workers can’t find jobs or don’t get pay raises, they can’t spend money that goes back to businesses

  5. The Tax Solution • Lower taxes on wealthy people & corporations • They keep more $ which can be used to: • Pay workers more • Expand their business and hire new workers • Workers get more jobs or higher pay which they spend on stuff they buy from businesses • Also known as “trickle-down” economics • Let’s try to make Wonka Barsagain

  6. The Spending Problem • Lower taxes means the government collects less tax money • Less money for the government to spend (defense, welfare programs, education, etc) • We have to borrow money to pay for these things • Puts us into debt

  7. The Spending Solution • Cut government spending • Less money for welfare programs (Medicare & food stamps) • Less money for student loans • Less money for unemployment assistance

  8. Did it work? • By 1984 (3 years after Reagan took office), the U.S. experienced its largest economic expansion in history • Average family income increased by 15 percent between 1983 and 1989 • 5 million new businesses were created • 20 million new jobs created • Unemployment fell to 5.5% (lowest in 14 years)

  9. Quick Review • Why did Reagan believe that high taxes on the wealthy were hurting the economy? • They own businesses which can’t hire workers if they are paying high taxes • What did Reagan believe would happen if taxes on the wealthy were lowered? • They would hire more workers • How did Reagan make sure that the lower taxes didn’t lead to higher debt? • Cut government spending

  10. Reaganomics: What could go wrong? Organize yourselves into your typical groups of 3 or 4 and get out a half-sheet of paper for the entire group (put your names on it) Brainstorm in your groups ways in which Reaganomics could backfire or could create new problems • List these issues on your half-sheet

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