The Effects of Reaganomics and The Reduction of Welfare Programs

Reagan was a conservative, and he believed that government shouldn't interfere too much with peoples' lives or the people will become dependent on the government. As a part of Reaganomics (supply-side economics) Reagan cut taxes mainly for big business and the upper class. However, to make up for the loss in revenue, Reagan decided to reduce welfare spending. Many middle class and upper class people were hardly effected by this, but the lower class and the inner cities were hit hard. Reaganomics initially caused a major economic recession, and in the inner cities many people lost their jobs and homes. Because of the degrading quality of life, many poor people turned to the cheap drug crack, and soon many people had become addicted. This caused a growth in the drug business in the 1980s, and many drug dealers were able to become extremely wealthy. In addition Reagan cut regulations in the stock market, and as a result Wall Street exploded. There was a large brain drain towards the finance industry, and many people were able to become successful there. However, businesses began doing corporate raids, in which a company buys the assets of another company and takes over the company, and then liquidates the company and sells everything the company owns to earn more money than they spent to buy it. This was very harmful for some American people, because in some towns the whole town revolved around a single business, and if the business was raided the town would be devastated.