Final answer:
President Reagan's presidency saw aggressive tax cuts and increased defense spending, leading to an upturn in the economy post-recession, but with a significant increase in national debt from $900 billion to nearly $3 trillion. While his policies helped lower unemployment and inflation, they also contributed to a substantial federal deficit and an unequal distribution of wealth, sparking ongoing debate regarding their long-term economic impact.
Step-by-step explanation:
Fiscal Impact of President Reagan's Two Terms in Office
The fiscal impact of President Reagan's tenure can be characterized by aggressive tax cuts, increased defense spending, and significant federal debt accumulation. Initially, the nation faced high inflation and a deep recession, with unemployment reaching 10 percent and homelessness escalating in urban areas. However, economic growth resumed by 1983, and the gross domestic product (GDP) saw an average increase of 4.5 percent thereafter, contributing to the reduction of unemployment to about 5.3 percent by the end of Reagan's second term. Despite the economic growth and job creation, the national debt skyrocketed from $900 billion to nearly $3 trillion, as the federal government ran large budget deficits due to Reaganomics and its underlying supply-side economics theory.Ultimately, Reagan's fiscal policies, known as Reaganomics, are seen by many as a key contributor to the shift towards a more indebted nation, with a sharp increase in wealth disparity and a contentious legacy in the realm of economic policy.