What did Ronald Reagan do to rebuild the economy in the 80s?

cut taxes

First, no matter the political spin and the rewriting of history, presidents have little direct impact on any economy. It is the Congress that passes the laws and the President tries to lead the Congress in a certain direction. Several factors came together during President Ronald Reagan’s administration. Trickle-down economics is a rhetorical term for tax cuts on high incomes and business activity for the general public who have little understanding of how economies work. For those who hate businesses and those who make large incomes, it is like a red cape in front of a bull in that they go nuts thinking that big business and rich people might get something. They seem to believe that all big business and rich people act in march step accord that they take this money and keep it from everyone else, but this doesn’t reflect any type of reality. Consider taking this to the extreme by ending all business income tax. At first blush many would say look at all of the new profit, but that wouldn’t happen. These businesses are competitive in the extreme. Product prices would begin to drop and would continue until all of the missing tax was eliminated. If you were president of a company and could increase your product sales unit volume by lowering retail price without lowering your desired profit percentage, you would do it because you know that your competition would do it. Consumers would gain as product prices fall and yet their purchasing power remains the same. In such an economic environment being favorable to business would attract foreign investment to the United States. All of this together would combine to grow not only the number of jobs but would increase wages in competition for employees. This could be enhanced by going outside of “trickle down” and eliminate personal income taxes. In such an environment, business would not have any incentive to decrease wages and the people’s purchasing power would dramatically increase. This would increase product demand and the demand for additional employees. Hating business isn’t reality. Business is the solution. Even the proposed tax reductions of President Ronald Reagan’s administration had some of this affect because the economy had healthy growth. However, a great deal of the economic gain was negated by Congress not reducing the size of government. To put it in perspective, in 1928 the cost of all government (federal, State, local) equaled 10% of the Gross Domestic Product (GDP). In fact State and local was 7% of GDP and federal was 3% of GDP. In our time this has changed to State and local being about 10% of GDP and federal being nearly 40%. This drags the economy down, but even with this extraordinary cost of government, the business economy continues to grow.

He created supply side economics which directly lead to the creation of low wage, crap jobs. His tax cuts for big business were supposed to "trickle down" to the working class in the form of jobs. Instead the business pocketed most of the tax savings and created only sporadic middle class help. The fact that you can get a minimum wage job at McDonald's is the economic legacy he left because before 1980 you couldn't even get those jobs.