alternatehistory.com

Ronald Reagan won 1980 on a pledge of American recovery and American exceptionalism. Gone would be the malaise of the 1970s, which became embodied in Carter. Within hours of being elected, the hostages were freed from Iran, leaving economic recovery as the pressing issue. However, Reagan's initial handling of the economy, involving budget cuts and tax cuts, deregulation, and military build up, failed to produce economic recovery, and the early 1980s was a period of the worst recession since the Great Depression.

http://www.pbs.org/wgbh/americanexperience/features/general-article/reagan-recession/

By November 1982, unemployment reached, nine million, the highest rate since the Depression; 17,000 businesses failed, the second highest number since 1933; farmers lost their land; and many sick, elderly, and poor became homeless.

The country lived through the recession for a full year before Reagan finally admitted publicly that the economy was in trouble. His budget cuts, which hurt the poor, and his tax cuts, which favored the rich, combined with the hardships of a recession, spawned the belief that Reagan was insensitive to his people's needs. (Although it was a 25% across-the-board tax cut, those people in the higher income brackets benefited the most.)

As economic hardship hit American homes, Reagan's approval rating hit rock bottom. In January 1983, it was estimated at a dismal 35 percent. Having failed in his promise to deliver economic prosperity, Reagan's reelection in 1984 seemed unlikely.

With a failing economy, hopes for a balanced budget vanished. Even David Stockman, Reagan's Budget Director and an advocate of supply side economics, fearing future deficits "as high as $200 billion," urged the president to cut taxes.

While Reagan finally agreed to a moderate tax increase on businesses, he steadfastly refused to raise income taxes or cut defense spending, despite a growing negative sentiment toward the buildup. In January 1983, with his approval rating at an all-time low, the economy slowly began to right itself. Unemployment, as high as ten percent in 1982, had improved enough by 1984 for his popularity to be restored, and by the November presidential election, it was hard to believe that a second term was ever in doubt.

Let us argue that the economy did not begin to right itself, or at least not fast enough, and going into 1984, Ronald Reagan was suffering the same problems that had affected the presidencies of the 1970s. It would be a Reagan who won on hope and optimism, but who had failed to properly steer the ship of state, and whom the American people had lost faith in. It would be a Reagan in a very similar position to Cater.
Top