The U.S. economic policy package associated with President Ronald Reagan was called Reaganomics. The term describes the administration’s approach to taxes, government spending, regulation, and monetary conditions during the 1980s.
Its central policies included reductions in marginal income-tax rates, slower growth of some government spending, deregulation, and a monetary policy environment focused on defeating inflation. The Economic Recovery Tax Act of 1981 was one of its major legislative components.
Supporters argued that lower tax rates would encourage investment, work, and economic growth. Critics pointed to rising federal deficits, increased inequality, and the uneven distribution of benefits. The policy label therefore remains politically and economically contested.
Reaganomics is not the same thing as the Federal Reserve’s anti-inflation program. The Fed, led by Paul Volcker early in Reagan’s presidency, used high interest rates to reduce inflation, while the administration pursued its fiscal and regulatory agenda.