10th American History

1
10th American History

• U.S. Economic History

2
Handy Dandy Guide to Economic Thinking

• 1. People choose to do the things they think are
  best for them.
• 2. Peoples choices have costs.
• 3. People choose to do the things for which they
  are rewarded. (People respond to incentives)-
  such as money.
• 4. People create rules that affect their choices
  and how they act. (People create ECONOMIC
  SYSTEMS that influence individual choices and
  incentives.)
• 5. People gain when they freely decide to trade
  with one another. Free trade creates wealth.
• 6. Peoples choices today have future results.
  People often live for tomorrow.

3
Economic Questions

• What is economics?
• EconomicsThe study of choice and decision-making
  in a world with limited resources.
• Economic Growth A sustained increase in total
  output or output per person for an economy over a
  long period of time.
• Economics is based on two facts
• 1. Society's material wants are virtually
  unlimited or insatiable
• 2. Economic resources are scarce
• Economic resources are all natural, human, and
  manufactured resources that go into the
  production of goods and services
• 1. Land and all "gifts of nature" (arable land,
  forests, mineral deposits)
• 2. Capital all manufactured aids to production
  (tools, machinery)
• 3. Labor all physical and mental talents of men
  and women.
• 4. Entrepreneurial Ability entrepreneurs have
  initiative, make basic business-policy decisions,
  be innovative, and take risks

4
Economic Questions

• What is economics?
• Economic Systems -The way a society organizes the
  production, consumption, and distribution of
  goods and services.
• Market Economy -An economic system where most
  goods and services are exchanged through private
  transactions by private households and
  businesses. Prices are determined by buyers and
  sellers making exchanges in private markets.

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Economic Questions

• What are goods, services and resources?
• Goods-Objects that can be held or touched that
  can satisfy peoples wants.
• Services- Activities that can satisfy peoples
  wants.
• Resources-All natural, human and human-made aids
  to the production of goods and services. Also
  called productive resources.
• Natural Resources-"Gifts of nature" that are
  present without human intervention (also called
  land). Human Resources-The quantity and quality
  of human effort directed toward producing goods
  and services (also called labor). Capital
  Resources-Goods made by people and used to
  produce other goods and services (also called
  intermediate goods).

6
Economic Questions

• What is supply and demand?
• Demand - A schedule of how much consumers are
  willing and able to buy at all possible prices
  during some time period.
• Supply - A schedule of how much producers are
  willing and able to produce and sell at all
  possible prices during some time period.
• Equilibrium Price - The market clearing price at
  which the quantity demanded by buyers equals the
  quantity supplied by sellers.

7
Economic Questions

• What are unemployment, shortages and surpluses?
• Unemployment - The situation in which people are
  willing and able to work at current wages but do
  not have jobs.
• Shortages- The situation resulting when the
  quantity demanded exceeds the quantity supplied
  of a good, service, or resource.
• Surpluses -The situation resulting when the
  quantity supplied exceeds the quantity demanded
  of a good, service, or resource, usually because
  the price is for some reason above the
  equilibrium price in the market

8
Economic Questions

• What are producers, consumers and markets?
• Production/Producers- People who use resources to
  make goods and services, also called workers.
• Consumers-People whose wants are satisfied by
  using goods and services.
• Markets-Any setting where buyers and sellers
  exchange goods, services, resources, and
  currencies.

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Economic Questions

• What are stocks, bull markets and bear markets?
• Stocks- Ownership of a corporation represented by
  shares that are a claim on the corporation's
  earnings and assets.
• Bull Markets-prolonged period in which investment
  prices rise faster than their historical average.
  Bull markets can happen as a result of an
  economic recovery, an economic boom, or investor
  psychology. The longest and most famous bull
  market is the one that began in the early 1990s
  in which the U.S. equity markets grew at their
  fastest pace ever
• Bear Markets-A prolonged period in which
  investment prices fall, accompanied by widespread
  pessimism. Bear markets usually occur when the
  economy is in a recession and unemployment is
  high, or when inflation is rising quickly. The
  most famous bear market in U.S. history was the
  Great Depression of the 1930s

10
Economic Questions

• What is Money?
• Medium of Exchange Money allows people to avoid
  the complications of barter. For example, a
  bookseller does not want to be paid in bagels
  because others may not accept bagels as a means
  of trade. Money is convenient because it is
  accepted by all.
• What gives money it's value?
• Everybody accepts it
• Legal Tender - currency has been designated as
  legal tender by government, which means it must
  be accepted as payment
• Relative Scarcity - money derives its value from
  it's scarcity relative to utility

11
Economic Questions

• What is profit?
• Profit - The difference between the total revenue
  and total cost of a business entrepreneurial
  income- (The human resource that assumes the risk
  of organizing other productive resources to
  produce goods and services.)

12
Economic Questions

• What is GDP?
• GDP is Gross domestic product. For a region, the
  GDP is the market value of all the goods and
  services produced by labor and property located
  in the region, usually a country.
• GDP measures the market value of annual output
• It is a monetary measure
• GDP includes only market value of final goods and
  ignores transactions involving intermediate goods
  to avoid double counting. Intermediate sales of
  goods are all the steps before the final selling
  of the good. For an example the cotton to make a
  shirt may be sold to the shirt manufacturer but
  it is not counted in the GDP because the cotton
  was an intermediate goodthe final good is the
  shirt.

13
Economic Questions

• What is inflation?
• Inflation Inflation is a sustained increase in
  the average price level, or general rise in the
  price of the entire economy.
• Tight Money PolicyThis policy is exercised in
  times of inflation.
• Components1). Selling securities to banks and
  the public. 2). Increase the Federal Funds Rate.
  3). Increasing the Discount Rate. 4). Increase
  the Reserve Ratio
• Easy Money Policy This monetary policy is used
  when the economy is faced with recession and
  unemployment.
• Components 1.) Buy Securities from commercial
  banks and public. 2.) Reduce the Federal Funds
  Rate. 3.) Lowering the Discount Rate. 4.)
  Reduce the Reserve Ratio

14
Economic Questions

• What are Taxes?
• Taxes- Required payments of money made to
  governments by households and business firms.
• Income Taxes - Taxes paid by households and
  business firms on the income they receive.
• Property Taxes - Taxes paid by households and
  businesses on land and buildings.
• Sales Taxes - Taxes paid on the goods and
  services people buy.

15
Economic Questions

• What is a depression?
• Theres an old joke among economists that states
  A recession is when your neighbor loses his job.
  A depression is when you lose your job.
• A depression is any economic downturn where real
  GDP declines by more than 10 percent. A time of
  economic crisis or bad times in commerce,
  finance, and industry, characterized by falling
  prices, restriction of credit, low output and
  investment, many bankruptcies, and a high level
  of unemployment (many people without jobs). The
  last depression in the United States was from May
  1937 to June 1938, where real GDP declined by
  18.2 percent.
• A recession could be defined as the time when
  business activity has reached its peak and starts
  to fall until the time when business activity
  bottoms out. By this definition, the average
  recession lasts about a year. A recession is an
  economic downturn that is less severe.

16
Economic Questions

• What precisely is the national debt?
• It's the total amount of funds that the federal
  government has borrowed over the years and not
  yet repaid.
• And what about the deficit? That's the amount
  that the government spends each year in excess of
  what its tax, tariff, and fee revenues bring in.
  The government then must borrow to make up the
  difference. It's the accumulation of deficits
  year after year that makes up the total national
  debt.
• Why do we have deficits? Because the government
  makes commitments to spending programs without
  raising enough revenue to pay for them.
  Therefore, the government has to borrow.
• How does the government borrow money? Does it
  just go to the bank? No. The U.S. Treasury
  issues securities, or IOUs, such as savings bonds
  and Treasury bills, notes, and bonds. Lenders buy
  these securities and the money goes to the
  government. In return, the government pays
  interest to the owners of the securities.

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Economic Questions

• National
• Debt?

18
Economic Questions

• National Debt Clock (Hyperlink)
• Wow! When did the debt get so big? Well, for the
  past two decades the net debt has risen very
  rapidly. At the end of fiscal 1973, it was about
  a third of a trillion dollars in 1983, a little
  over 1 trillion and in 1993, it was more than
  3 trillion. The government has been increasing
  its spending particularly on such items as
  Social Security, Medicare, and, for a time,
  national defense at a rate faster than
  revenues have been growing. Also, there is a
  snowball effect resulting from each increase in
  the debt as the debt expands, so do the interest
  payments.
• Anything else? In addition, the inflation and
  high interest rates of the 1970s and early 1980s
  contributed to the rapidly growing debt. Even
  with inflation and interest rates declining in
  recent years, the debt has not been reduced,
  because spending has continued to outpace
  revenues.
• Has the debt always been rising? The first great
  surge in the national debt was caused by U.S.
  participation in World War I. By the time the war
  ended in 1918, the debt had increased from a
  little over 1billion to about 15 billion. The
  second surge took place during the Great
  Depression. There was high unemployment and,
  therefore, less taxable income. New social
  programs meant that the government had to borrow
  in order to finance increased spending. As a
  result, the debt climbed to almost 50 billion by
  the start of World War II.
• What does "fiscal" mean? For budget purposes,
  the government year runs from October 1 to
  September 30 this is a called a fiscal year. For
  example, the 1996 fiscal year starts October 1,
  1995, and ends September 30, 1996.

19
Test your economic IQ

• How much do you know about our how our economy
  works and how it affects you? According to the
  National Council on Economic Education, the
  average graduating H.S. student should be able to
  score 100 on the following quiz. Can you?

20
1

• The town of Bedford Falls wants to buy four new
  police cars. The opportunity cost of buying the
  police cars is the
• (a) cost of buying the cars now vs. buying them
  later.
• (b) ability to make more arrests and reduce the
  total annual crime rate.
• (c) other desirable goods or services that must
  be given up to buy the cars.
• (d) dollar cost of the new cars.

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Answer for 1

• C
• Opportunity Cost the next best alternative that
  must be given up when a choice is made.

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2

• The best measure of the economys performance
  is
• (a) the unemployment rate.
• (b) gross domestic product.
• (c) consumer price index.
• (d) Dow Jones industrial Average.

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Answer for 2

• B
• Gross Domestic Product (GDP) The market value
  of all final goods and services produced in the
  economy in a given period of time.

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3

• The best definition of profit is
• (a) total assets minus total liabilities.
• (b) total sales minus total taxes.
• (c) total revenues minus total costs.
• (d) total sales minus total wages.

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Answer for 3

• C
• Profits total revenues from exchange minus
  total costs associated with production of a good
  or service. Profits are the resource payment to
  the entrepreneur or the owners of a business
  enterprise.

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4

• Gross Domestic Product is a measure of
• (a) total market value of all final goods and
  services produced in one year.
• (b) the price level of goods and services sold in
  one year.
• (c) the total amount of refrigerators, washing
  machines and other household appliances produced
  in one year.
• (d) the total amount of goods and services
  produced by private companies in one year.

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Answer for 4

• A
• Gross Domestic Product (GDP) The market value
  of all final goods and services produced in the
  economy in a given period of time.

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5

• Who would benefit from an unexpected 10
  inflation rate?
• (a) Sam, who has 5,000 in a savings account.
• (b) Maria, who has a 5,000 life insurance
  policy.
• (c) John, who loaned Bonnie 5,000 last year.
• (d) Bonnie, who borrowed 5,000 from John and
  must pay it back this year.

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Answer for 5

• D
• Bonnie would benefit. Inflation is a sustained
  increase in the average price level, or general
  rise in the price of the entire economy. She
  benefits because even though prices go up, her
  loan rate and amount will remain the same. Cheap
  money.

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6

• Who would benefit if the U.S. dollar becomes
  stronger against the Japanese Yen?
• (a) a Japanese company selling products in the
  U.S.
• (b) a U.S. company buying a building in Japan.
• (c) a U.S. tourist taking a two week vacation in
  Japan.
• (d) all of the above.
• (e) none of the above.

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Answer for 6

• D
• They all benefit. This has to do with exchange
  rates the price of a nations currency in terms
  of the currency of another nation.

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7

• The limit of the economys real output at any
  time is set by
• (a) the quantity and quality of human and natural
  resources and capital goods.
• (b) the total amount of money, stocks, and bonds
  in circulation.
• (c) business demand for goods and services.
• (d) the amount of government spending and taxes.

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Answer for 7

• A
• Economic resources land, labor, capital goods
  and entrepreneurs.

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8

• If your annual money income goes up 10, while
  the prices of what you buy go up 20 then
• (a) your real income has risen.
• (b) your real income is unchanged.
• (c) your real income has fallen.
• (d) youre shopping in the wrong stores.

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Answer for 8

• C
• Real Income money income adjusted to compensate
  for inflation.

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9

• Three major productive resources are natural
  and human resources and capital goods. Which
  best illustrates these three productive
  resources?
• (a) rent, workers and money.
• (b) iron ore, taxi drivers and bonds.
• (c) farmers, importers, and exporters.
• (d) oil, engineers, and drills.

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Answer for 9

• D
• Economic resources land, labor, capital goods
  and entrepreneurs.

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10

• Nation A grows bananas and Nation B produces
  cheese. If they exchange bananas and cheese
• (a) Nation A gains and Nation B loses.
• (b) Nation B gains and Nation A loses.
• (c) Both Nations lose.
• (d) Both Nations gain.

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Answer for 10

• D
• They both benefit. This has to do with
  international trade the exchange of goods and
  services between people and institutions in
  different countries.

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11

• True or False Most millionaires are college
  graduates

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Answer for 11

• True
• Four of five millionaires are college graduates.
  Eighteen percent have Masters degrees, eight
  percent law degrees, six percent medical degrees
  and six percent Ph.D.s.

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12

• Most millionaires work fewer than 40 hours a
  week.

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Answer for 12

• False
• About 2/3 of millionaires work 45-55 hours a week.

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13

• More than half of all millionaires never
  received money from a trust fund or estate.

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Answer for 13

• True
• Only 19 of millionaires received any income or
  wealth of any kind from a trust fund or an
  estate. Fewer than 10 of millionaires
  inherited 10 or more of their wealth.

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14

• Most millionaires work in glamorous jobs, such
  as sports, entertainment, or high tech.

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Answer for 14

• False
• A majority of millionaires are in ordinary
  industries and jobs. They are proficient in
  targeting marketing opportunities.

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15

• Many poor people become millionaires by winning
  the lottery.

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Answer for 15

• False
• Few people get rich the easy way. If you play
  the lottery, the chances of winning are about 1
  in 12 million. The average person who plays the
  lottery every day would have to live about 33,000
  years to win once. In contrast, you have a 1 in
  9 million chance of being struck by lightning. A
  pregnant woman has one chance in 750,000 births
  to have quadruplets. How many sets of
  quadruplets do you know?

50
Time spent on the job

• If you work from the time youre 21 years old,
  until youre 70 years old, youll work 49 years.
• If you work an average of 50 weeks for each of
  those 49 years, youll work 2450 weeks.
• If you average 40 hours for each of those 2450
  weeks, youll work 98,000 hours minimum. (A high
  school dropout works 10 hours a week more to earn
  the same pay as a high school graduate.)
• And that doesnt include your lunch hour, the
  time it will take to get to and from work,
  overtime hours and time you will spend keeping up
  to date on new skills required for your career.

51
Rules for improving your financial life

• 1) Get a good education.
• 2) Work long, hard and smart.
• 3) Learn money management skills.
• 4) Spend less than you can spend.
• 5) Save early and often.
• 6) Invest in common stocks for the long term.
• 7) Gather information before making decisions.

52
Industrial Revolution

• Oil
• Steel
• Railroads
• Big Business
• Corporations
• Monopolies and the Sherman Anti-Trust Act 1890
• McKinley Tariff 1890- Protectionism and Tariff
  war.
• Wilson Gorman Tariff- 1894- slight reduction in
  tariff and income tax (ruled unconstitutional)

53
Industrial Revolution

• Rockefeller, Carnege, Vanderbilt, and Pullman-
  Robber Barons or Captains of Industry?
• Mass Marketing
• Unions- Organization, Strikes, Violence, and
  Bread and Butter Unionism (better pay, shorter
  hours, and better conditions)
• Transportation and Communication improvements of
  the late 1800s
• Silver v. Gold Issue and the Populists

54
Progressivism

• Square Deal and Theodore Roosevelt
• Regulating Big Business- Sherman Anti-Trust and
  Trust Busting
• 16th Amendment - 1913
• Taft and the Payne-Aldrich Tariff- supposed to
  lower tariffs actually raised them
• Wilsons New Freedom
• Tariff reform
• Banking reform- Federal Reserve System
• Anti-Trust Laws- Clayton Anti-Trust Act

55
What is the Federal Reserve? It manages the
countries money system regulates the banking
system is a bankers bank and is the
governments bank.
56
Imperialism

• Why? Economic, Military and Ideology
• Manifest Destiny
• Hawaii- trade, sugar, bayonet constitution and
  annexation
• China- trade, Treaty of Wanghia 1844- gave U.S.
  most favored nation status, Spheres of
  Influence, Open-Door Policy and Boxer Rebellion
• Japan- trade, Commodore Matthew Perry, and the
  Treaty of Kanagawa.
• Spanish American War- Cuba, Philippines, Guam and
  Puerto Rico.
• Panama Canal
• Tafts Dollar Diplomacy

57
World War I

• Financial ties to the Allies
• Unrestricted submarine warfare
• Homefront
• Mobilizing the economy- industry, food, fuel and
  supplies
• Mobilizing workers- National War Labor Board,
  Women,
• Paying for the War- Taxes and Liberty Bonds (war
  bonds)
• Economic Impact on US and the World

58
Post World War I

• Labor Strife- difficulties, labor losses and
  major strikes.
• New Economic Era
• Henry Ford, the Assembly line and worker pay.
• The effect on industry competition,
  productivity, and welfare capitalism.
• The New Consume new products, advertising and
  demand, installment paying and credit.
• Weaknesses many Americans were suffering after
  WWI- farmers, overproduction, low prices, farm
  failures, insects, floods, hurricane, etc,
  brought economic depression to many parts of the
  nation.

59
Harding and Coolidge

• Harding
• Cut federal budget and reduced taxes on wealthy
  (trickle down).
• Fordney-McCumber Tariff- high tariff, foreign
  products went up, American prices went up- hurt
  farmers and Europeans.
• Teapot Dome Scandal- Bribes from Oil companies to
  drill for oil in federal oil reserve.
• Coolidge
• Business of America is business
• Business would help America grow, promote the
  arts and sciences and fund the charities.
• Limited role of government in business.
• Lowered taxes and reduced the budget.
• Weakened federal regulations on business.
• War Debt- Europe owed the U.S. over 10 billion,
  but too war torn and tariffs to high, force
  Germany to pay more reparations. U.S. become
  worlds banker.

60
1920s

• The role of women- work outside the home during
  WWI. Economic boom of the 20s provided jobs for
  women.
• Urbanization
• Hard times in agriculture saw people move to
  cities to get work.
• Rise of the automobile
• Increase in eduation
• Industrial growth means rise in earnings
• Gross Domestic Product- between 1922-1928 grew
  30
• Growth of the automobile industry
• Corporate profits up, unemployment down, welfare
  capitalism, and the ability to purchase new
  products and services
• Stock Market expansion-
• False Sense of Security

61
1920s

• Weaknesses
• Wealth Distribution
• Credit on the Stock Market- buying on margin
• Federal Reserve System
• Stock Market Crash
• Black Thursday, Black Monday, Black Tuesday
• GDP dropped almost in 1/2
• Effects of the crash- Individuals, Banks (over
  5,000 closed), Business and World Economy.

62
The Great Depression 1930s

• Bank Failures
• Farm Failures
• Unemployment
• Hoovervilles
• Dust Bowl
• Hoover
• Rugged individualism- to much government dims the
  spirit of Americans
• Associative State- partnership between business
  associations and the government- Hoover Dam.
• Voluntary cooperation between business and
  government.
• Direct Action- loans to banks, insurance
  companies, encourage home building and make work
  projects.
• Smoot-Hawley Tariff- raised cost of imported
  goods to get American consumers to buy cheaper
  American goods. Europe raised tariffs on
  American goods and a tariff war began.

63
FDR and the New Deal

• Banking Crisis-
• Bank Holiday
• Emergency Banking Act.
• Glass-Steagall Act- FDIC
• Relief, Recovery and Reform
• Alphabet soup programs
• Emergency Relief Appropriations Act and WPA.
• Social Security
• Wagner Act- National Labor Relations Act, NLRB,
  CIO, Sit-down strikes,
• Rural Electricity
• Economic Recovery? 1937 drop in stock market-
  Deficit spending and Keynesian Theory. Minimum
  wage.
• Did the New Deal end the depression?

64
World War II

• Hyper Inflation in Germany after WWII
• Neutrality Act- 1935
• Cash and Carry policy
• 50 Warships for 8 British bases.
• Lend-Lease Act
• Mobilizing for War
• Soldiers
• Women
• New Military bases
• Industry and Science- labor and the Manhattan
  project, retooling
• African Americans- military and workforce
• Hispanic Americans
• Food, rationing, and recycling- Office of Price
  Administration, War Production Board
• Paying for the war- taxes and war bonds

65
Cold War and the Iron Curtain

• Truman Doctrine- aid to countries fighting
  communism.
• Marshall Plan- European Recovery Program- over
  13 Billion spent.
• G.I. Bill
• Labor Unions after the war and Taft-Hartly Act
  1947- reduce union power, closed shops outlawed
  and 90 day cooling off.
• World Bank- Help poor countries build their
  economies- money grants and loans.
• International Monetary fund- encourage economic
  policies that promoted international trade.
• GATT (General Agreement on Tariffs and Trade)-
  reduce trade barriers.

66
Eisenhower Era

• Space Race- Sputnik, Explorer, NASA and the
  National Defense Education Act.
• Military-Industrial Complex- Our permanent arms
  industry could be a threat to freedom.
• Technological developments- television,
  transistors and integrated circuit, computers
  (UNIVAC), vaccines
• 1950s Boomtime- Levitown, sunbelt, interstate
  highways.
• Ike wanted
• To cut back on the size of government, taxes,
  budget and regulations
• He supported private ownership over government
  ownership.
• Flexible price supports for farmers and a Soil
  Bank plan.
• New Cabinet position- Dept. of Health, Education
  and Welfare

67
JFK

• New Frontier- the domestic policy and changing
  the nation.
• Asked Congress to reduce taxes to fight
  unemployment Congress failed to act.
• Asked Congress for 6 billion in federal aid to
  education failed in Congress.
• Wanted to use Social Security to fund medical
  care to aged Congress did not consider it.
• Got Steel companies and unions to cut back price
  and wage increases.
• Wage and Price Guideposts- increase in wages was
  tied directly into increase in output. Help stop
  inflation.
• Aid to the poor- Area Redevelopment Act 1961-
  financial aid to economically stressed areas
• Raised minimum wage from 1.00 to 1.25 per hour.
• The Space Program

68
Lyndon B. Johnson

• Great Society
• The Job Corps and VISTA
• War on Poverty- 1962-1968- 12 to 27 billion and
  percentage of poor fell from 20 to 12
• Tax Reduction Act 1964
• Medicare and Medicaid
• Conservation and Ecology
• Secondary and Elementary Education Act and Higher
  Education Act
• Vietnam
• Costs- 2.5 Billion per month- this hurt the
  Great Society.

69
Nixon

• Key Actions
• Space- Moon landing
• Winding down of the Vietnam War
• Cambodian Incursian
• Kent State
• Détente
• Visit to China and Ping Pong Diplomacy
• Visit to Russia S.A.L.T.
• New Federalism
• give states control and reduce Federal
  Government- deregulation

70
Troubled Economy

• Inflation and Stagflation
• Nixon Promised to balance the Budget (200
  Billion) and produce a surplus.
• Tax Reform Act- 1969 ended the Johnson income tax
  surcharge.
• Vietnam costs rising.
• 1969-1970- Nixon proposed wage-price guidelines
  to slow down prices.
• Congress created EPA.
• Arab oil embargo caused oil prices to jump in
  1973.
• Baby boomers in job market- glut.

71
Troubled Economy

• Aug. 15, 1971- Nixon announced a 90 price freeze
  after prices went up 14.5 (first mandatory
  wage-price control in peace time.)
• Took the country off the gold standard. This
  would end the gold drain to foreign countries
  turning U.S. dollars in for U.S. gold.
• 10 surcharge on foreign imports. Trying to
  promote sale of U.S. goods abroad and discourage
  Americans from buying foreign products- Japan
  W. Germany.
• The Economy began to thrive
• Inflation fell to 3.5
• Unemployment dropped

72
Troubled Economy

• Winding down the Vietnam War- Costs
• Economic Costs
• The war cost the United States more than 140
  billion.
• In Vietnam, the last sustained war the nation
  fought, the United States spent 111 billion
  during the eight years of the war, from 1964 to
  1972. Adjusted for inflation, that's more than
  494 billion, an average of 61.8 billion per
  year, or 5.15 billion per month. (The Pentagon
  is spending nearly 5 billion per month in Iraq
  and Afghanistan, a pace that would bring yearly
  costs to almost 60 billion)
• Human Costs
• There were 540,000 American troops in Vietnam
  sent by Presidents Kennedy and Johnson, more than
  325 men being held prisoners of war, and America
  was sharply divided over our purpose and our
  presence in Vietnam.
• The war left 58,000 American soldiers dead and
  more than 300,000 wounded. Numerous American
  soldiers also returned home with crippling and
  long-lasting psychological wounds.

73
Troubled Economy

• Voyage to the Moon- Apollo 11
• Televised- Hundreds of millions of viewers
• 3 Astronauts- Armstrong, Aldrin and Collins.
• Lunar Module- the Eagle
• The Eagle has landed on Tranquility base. July
  20, 1969
• 6 and 1/2 hours on the Moon.
• Costs- three astronauts killed in a fire on earth
  and between 25-35 Billion dollars.
• Benefits- Priceless

74
President Ford

• Wanted to cut government spending- had to fight
  Congress over this.
• Budget and Impoundment Act of 1974- stopped the
  President from impounding or refusing to spend
  money Congress had voted.
• Oil and Inflation

75
President Carter

• Economy
• Inflation
• Unemployment
• Energy
• Established the Department of Energy
• Ease dependence on foreign oil- conservation, new
  sources and loosening government regulations
• Change American Habits
• Alternative energy and tax breaks
• Environment
• Alaskan National Interests Lands Conservation Act
• Three Mile Island- nuclear power disaster
• Love Canal- toxic waste cleanup

76
President Reagan

• Economy
• Lower taxes and smaller government (reducing
  agencies and cutting the federal budget and
  eliminating budget deficits.)
• Strong military- increase in defense spending
• loosened government regulations
• Supply-Side Economics
• Tax cuts and business incentives stimulate
  investment
• Investment encourages economic growth
• This results in and increased supply of goods and
  services.
• VooDoo Economics cutting taxes and boosting
  military spending.
• Recession and Recovery
• 1981 and 1982 worst recession since great
  depression and the deficit skyrocketed
• Federal Reserve Board raised interest rates-
  1979-1982
• Economic growth favored the wealthy.
• Gramm-Rudman- Hollings Act- The Balanced Budget
  and Emergency Deficit Control Act- called for
  mandatory budget cuts to control inflation.

77
President George H.W. Bush

• Shakey Economy
• Read My Lips, no new taxes
• 1980s-1990s- uneven economic growth- Famers did
  poorly, Older U.S. industries were hit hard.
• Reagans tax cuts benefited mostly the wealthy.
• Fed. actively raised and lowered interest rate-
  to avoid recession and inflation.
• Deficits
• Reagan tax cuts and increased military spending-
  budget deficits tripled.
• Rising trade deficit- difference between the
  value of U.S. exports and imports.
• Financial deregulation
• Reagans deregulation lead rise to corporate
  raiding.
• Companies raided were restructured, merged, sold
  off piece by piece, dissolved downsized.
• Savings and Loan Crisis
• 1990- President Bush broke campaign promise and
  raised taxes. But that did not stop the deficit,
  unemployment or poverty from rising.

78
President Clinton

• Economy
• Cut the deficit by having a major increase in
  taxes.
• Long period of low unemployment and low interest
  rates.
• Larger disposable income- income available for
  spending or saving.
• Stock Market was up
• Republican Contract with America- Congressional
  plan to balance the budget, fight crime, welfare
  reform and provide tax cuts.
• Health-care reform
• Health-care costs were rising sharply in 1990s.
• Very expensive and lots of major changes to
  health care system.
• Welfare reform
• Clinton plan limited time people could receive
  benefits and required to find work with two years
  of receiving benefits.
• International Trade
• NAFTA- North American Free Trade Agreement
• U.S., Canada, and Mexico- free trade zones no
  tariffs
• Would it increase trade or lose jobs.
• WTO- World Trade Organization replaced GATT as a
  means of settling trade disputes and forming
  rules for Global trade.

79
President George W. Bush

• Economy
• Booming stock market starting to fall
• Collapse of internet related stocks- dot.coms-
  Investors gambled billions on dot.coms, but
  profits did not appear as planned and prices
  dropped.
• Recession was beginning
• 2001- Tax cuts and new tax codes- would it spur
  the economy? It did not improve the economy and
  recession got worse.
• 2003- Tax cuts- hope to promote economic growth.
  Cuts on Dividends.
• Updated Medicare
• Running up large deficits.
• Social Security reforms- creation of private
  accounts to fund retirement.
• Department of Homeland Security
• War in Afghanistan, Osama bin Laden, War in Iraq,
  
• Health Care
• Energy and Environment
• Natural Disasters- Hurricane Katrina, Rita, etc..