The correct answer is B.
The problems the United States was expecting were the result of excessive government spending.
The economic policies promoted by Ronald Reagan are also known as Reaganomics. The four pillars of Reaganomics were :
- to reduce the growth of governmental spending,
- to reduce the federal income tax,
- to reduce government regulation,
- to tighten the money supply to reduce inflation.
In 1981, he signed into law significant cuts in government spending and tax rates. He cut the projected spending of the federal government by 4,7 % for the next fiscal year. Several Great Society Programs were sharply cut. There was a 32% cut in mass transport spending. According to many, these cuts were the most dramatic in the history of the country but many disagree with this statement. Government spending had been rising for more than three decades before, so all Reagan did was to bring it down to its state of 1970.
