[rey-guh-nom-iks] 
| the economic policies put forth by the administration of President Ronald Reagan, esp. as emphasizing supply-side theory. |
| Main Entry: | Reaganomics |
| Part of Speech: | n |
| Definition: | any economic plan that promotes low taxes, low social-services spending, and high military spending -- which then contributes to low interest rates, low inflation, and large budget deficits |
| Etymology: | from former President Ronald Reagan's economic policy |
Reaganomics
A popular term used to refer to the economic policies of Ronald Reagan, the 40th U.S. President (1981-1989), which called for widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets.
Investopedia Commentary
The term was used by supporters and detractors of Reagan's policies alike. Reaganomics was partially based on the principles of supply-side economics and the trickle-down theory. These theories hold the view that decreases in taxes, especially for corporations, is the best way to stimulate economic growth: the idea is that if the expenses of corporations are reduced, the savings will "trickle down" to the rest of the economy, spurring growth.
Prior to becoming Reagan's Vice President, George H. Bush coined the term "voodoo economics" as a proposed synonym for Reaganomics.
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See also: Budget, Deficit, Deflation, Disinflation, Federal Reserve Bank, Fiscal Policy, Keynesian Economics, Laffer Curve, Stagflation, Supply-Side Theory
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