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"Junk Bonds"/ Merger Movement
The "junk bonds" and the merger movement started off with a man named Michael Milken who began to sell "junk bonds" to loan associations, insurance companies, pension funds, and other big investors. Ronald Perelman, as well as others, began to use these "junk bonds" to obtain many companies and merge them together. Many corporations ended up taking on large amounts of debt and having unprofitable companies. By the late 1980s debt was taking up 50 percent of America's corporate pretax income. -
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Economic changes
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Last American Troops Withdraw From Vietnam
The last remaining troops were removed from vietnam by Nixon. Thus ended the longest war for America, and their first defeat. The war strained the nation's production capacities. This would lead to factories producing military goods instead of consumer. Payments were unbalanced due to funds being sent overseas, and the budget deficits left over from the war would help to increase inflation and interest rates. -
The Oil Crisis
On this day Egypt and Syria attacked Israel. The united states interfered and sent many supplies to help the Israeli. With their help they were able to make the Egyptians surrender. However, this brought major consequences. Arabian forces cut off oil supplies to the united states, their main source for fuel. This halted many industries in the united states because of the increase in price for oil. Also many jobs were lost at this time. -
Stagflation
Unemployment was not eliminating inflation like it used to-millions of workers lost their jobs, while prices kept rising. Stagflation was a mixture between stagnation and inflation. The federal government made it worse because wages and salaries rose due to inflation but taxes went up quickly because larger dollar incomes put individuals in higher tax brackets. This was called "bracket creep" which caused many "taxpayer revolts". Federal borrowing pushed up interest rates; hurting businesses. -
Alaska National Interest Land Act
This act, passed by Jimmy Carter, would allocate about 98 million acres of land to the National Wildlife Refugee System. This would mean that the oil and minerals that were of high demand, and were very high in quantities in Alaska were no longer available for collection. This would limit the economy, and force oil prices to soar since there was less oil able for collection. -
Reagan's Economic Policy
During his presidency, Reagan based his economic program on the theory of supply-side economics. This meant that he would reduce tax rates so people could keep more of what they earned. The point was to lower tax rates to induce people to work harder and longer, and that this in turn would lead to more saving and investment, resulting in more production and stimulating overall economic growth. These investments would help lower unemployment rates, and help the poor. -
"Read my lips: No new taxes."
George H.W. Bush, in running for president, came up with this slogan promising that he would not raise taxes. However, the problem that arose were deficits. Bush could not control the deficits and Congress was constantly refusing to cut military spending or close military bases. In 1992 the deficit hit $290 billion, causing Bush to have no choice but to agree with Congress and raise the income tax rate from 28 percent to 31 percent and higher taxes on gasoline, liquor, and other luxuries. -
Persian Gulf War
From 1990-1991 the united states helped saudi Arabia in their war in the Middle East. Even though their help in the war only lasted for about two years, tons of Money was lost, and exacerbated federal deficits even farther. The deficit in 1992 hit $290 Billion. -
President Bush Signs Massive Tax Cut
President W. Bush signed a massive tax cut into law. This $1.35 Trillion cut would be spread out over the next ten years of history. Other large tax cuts included JFK's in the 60s, and Reagan's in the 80s. This tax cut was to decrease the amount of money works had to pay in their income. Republican congressional leaders sought to make these cuts permanent, and congress extended them in January 2013. After a year, taxes resumed to their previous position. -
Stock Market Crash of 2008
The Dows jones industrial average dropped over 50% in less than a day. There was a growth in consumer debt since 1999, to afford homes, loans were needing to be taken out, but this was hard for the lower class, so the Federal National mortgage association put efforts to make mortgage loans more accessible for them.
