Reagan and the Cold War

1
Reagan and the Cold War

• Relations with the Soviet Union had cooled
  because of their 1979 invasion of Afghanistan

2
Afghanistan

• Soviets invaded Afghanistan in 1979
• To preserve Communism
• The Afghan people wanted a Muslim theocracy

3
Solidarity

• Polish workers rallied against high prices and
  low wages
• After initial support, the government decided to
  shut down the Solidarity movement 100s of its
  leaders were jailed
• The U.S. warned the Soviet Union not to interfere
  
• Eventually the movement succeeded in developing
  trade unions for Polish workers

4
Strategic Defense Initiative

• March of 1983 Reagan proposed
• Space defense program that could stop an ICBM
  from reaching its target.
• Hoped to render nuclear weapons impotent and
  obsolete

5
Soviets shoot down airliner!

• In September of 1983, the Soviets shot down a
  Korean commercial air plane with 269 passengers
  in Soviet airspace
• They claimed that the plane was spying it had
  drifted 300 miles off course

6
Latin America

• Grenada (1983)
• Marxist regime takes over the island Reagan
  goes in to protect students on island
• El Salvador (1984)
• We entered a civil war to try and keep Soviet
  influence from taking over the country
• Nicaragua
• Govt taken over by Soviet supported Sandinistas
  we support Contras (Boland Amendment, 1984)

7
Iran-Contra Affair

• The Boland Amendment cut-off funds for the
  Contras in Nicaragua
• Meanwhile, the Reagan administration is
  bargaining with Iran
• U.S. secretly sells arms to Iran and uses those
  profits to fund the Contras

8
Spending?

• How was the Reagan administration spending money?
• SDI
• Wars in Grenada, El Salvador and Nicaragua

9
Reaganomics

• Supply-side Economics
• Corporations and Medium-sized businesses
  tax-breaks Cut by 25
• Idea that the wealth would trickle down to the
  middle and lower classes
• Cut regulation on industries

10
Revenue?

• How was the Reagan administration making money?
• They werent making enough to keep the deficit
  from growing

11
Results of Reaganomics

• 1982 saw the highest unemployment rate since the
  Great Depression
• Gramm-Rudman-Hollings Act (1985)
• Automatic cuts when deficit goes up
• Tax Reform Law (1986)
• Eliminated some tax breaks
• Stock Market boom and increase of insider
  trading
• Savings Loans (SLs) crisis

12
Cold War Tension?

• Mikhail Gorbachev was elected in 1985
• He instituted glasnost more freedom and
  openness for the Soviet people
• He restructured the economy and government
  through perestroika
• Increasing foreign trade
• Decreasing military spending
• Use profits to modernize
• He signed the INF Treaty and agreed to leave
  Afghanistan