Lesson 3: Confidence Restored

Lesson Focus

Explore how America's confidence was restored in the 1980s under President Reagan. We'll examine new domestic and foreign policy challenges, from economic shifts at home to changing relations with the Soviet Union.

People to Know

Ronald Reagan, Mikhail Gorbachev, George Bush, Jesse Jackson

Learning Objectives

• Explain how increased defense spending during the Reagan administration contributed to the growing national deficit.
• Define glasnost and describe how it helped improve relations between the United States and the Soviet Union.
• Describe major domestic and foreign policy challenges that the United States faced during the 1980s.

President Reagan wanted to restore American confidence and challenge the Soviet Union.
He championed the Strategic Defense Initiative (SDI), a missile defense system nicknamed “Star Wars,” and spent over a trillion dollars on new weapons.
This massive military buildup sparked a nuclear freeze movement among those who feared an escalating arms race. Pay special attention to how this defense spending, while intended to project strength, also created major economic problems for the nation.

In 1985, new Soviet Premier Mikhail Gorbachev inherited a collapsing economy and internal unrest.
To save his country, he introduced glasnost (openness) and perestroika (restructuring) and sought to ease Cold War tensions by offering to reduce nuclear weapons.
Although SDI remained a point of conflict, Reagan and Gorbachev signed a historic treaty in 1987 that eliminated an entire class of nuclear missiles, signaling that the Cold War might be ending.

Reagan's administration combined massive defense spending with a firm refusal to raise income taxes.
This created huge annual budget deficits, forcing Congress to pass the Gramm-Rudman Act in 1985 to trigger automatic spending cuts if deficit targets were not met.
By 1988, the national debt soared to $2.3 trillion. Note that this policy passed a significant financial burden to future generations, limiting the government’s ability to fund other programs.

President Reagan's “hands-off” management style gave his staff great freedom, but it also led to a lack of oversight.
This resulted in the Iran-contra scandal, where officials secretly sold arms to Iran and illegally funneled the money to anti-government rebels in Nicaragua.
Though Reagan was not directly blamed, the scandal damaged his administration’s credibility, showed the dangers of an unchecked executive branch, and helped Democrats regain control of the Senate in 1986.

Reagan left office as a very popular president, but his achievements were mixed.
His optimism restored American confidence, and he worked with Congress to strengthen Social Security and Medicare. However, his economic policies, while stopping the growth of some welfare programs, created enormous federal deficits.
Reagan’s legacy is contradictory: he is remembered for both restoring national pride and creating a massive national debt that would challenge future presidents and restrict government action.

In the 1988 election, Vice President George Bush promised to continue Reagan's policies, while Democrat Michael Dukakis ran against him.
After trailing early, the Bush campaign launched a series of powerful negative TV ads that portrayed Dukakis as unpatriotic and weak on crime. Bush won a resounding victory.
This campaign showed that negative advertising and large campaign funds were becoming crucial factors in winning modern elections, often replacing thoughtful debate on issues.