Global Business Sense

There was a huge business recession throughout the year 1982. This was the time where more countries were learning to depict U.S business and trying the implement the same to their countries. Till that time U.S economy never experienced such a slow down on their economy. Though there were some ups and downs the impact which this year created is unforgettable. The number of business which filed bankruptcy in that year rose to 50% more than that of the previous year.

Agriculture business was the major affected business because of this recession. Agricultural exports were reduced, prices of the crops fell down, farmers found it very difficult to get profit out of their land and interest rates rocketed to a high level. Because of this deep impact, recovery seemed to be impossible. This thrashed the economy of U.S completely. After this year, inflation started easing, economy of U.S started rebounding and the growth of the economy was sustained to a controlled level. Inflation rate among the society was well controlled not to increase above 5 percent throughout the decade till 1990’s.

This period also had many political consequences. Americans started agitating against the federal policies which was present at the time of recession. People turned out Carter who was the present President at that time are elected a former actor Ronald Reagan as the president. Ronald Reagan was governor of California at that time. Reagan tried his best in stabilizing the economy during his period 1981 to 1989.

He designed his economic program by formulating a theory on supply side economics. This also helped in lowering the tax rates and most part of the earnings were made to be available to the people as the tax was reduced.  This act of reducing taxes motivated people to work hard and long. As money started flowing into the hands of the people, savings and investments also started increasing.

The theory framed by the president seemed to be working well. More savings and investments also helped the corporations in more production and the overall economy of the country was growing. But, this tax reduction program of Reagan mainly helped many rich Americans inducing them to invest more on their business. This in turn helped the lower income people because more investment leads to new business foundations and new job openings. Salary of the working labors also increased to a quite high level.

Along with cutting taxes, Reagan also advertised many social programs. Many regulations which were affecting the customers, environment and the work place were eliminated or reduced. During this period he also strengthens the military defense with the learning made from Vietnam War. Both of these measures taken by Reagan had overwhelming response from the people.

As a result the budget started having huge leaps forward throughout his period. The budget which started with 74,000 million dollars in 1980 jumped to 221,000 million dollars in 1986 and the word recession was erased from the business in U.S.