The Reagan Administration comprises the two presidential terms of Ronald W Reagan, Republican, from 1981 to 1989. From the beginning, the new president had to deal with Jimmy Carter’s botched jobs: stagflation (recession plus a high inflation rate), high unemployment, energy crisis, the American hostages in the US embassy in Teheran, new communist governments in Central America (the Sandinista regime in Nicaragua and Cuban troops in Grenada). To solve these and other international problems, Ronald Reagan appointed capable men for his cabinet: Alexander Haig, a retired US Army General, as Secretary of State; Caspar Weinberger, a businessman and World War II veteran from San Francisco, as Secretary of Defense; Donald Regan (1981-1985) and James Baker (1985-1988) held the administration Secretary of the Treasury position; and William French Smith as Attorney General.

To get America out of the economic slump, the President boosted the economy with large tax cuts, at the same time curbing currency supply in order to avoid generating inflation. To encourage private investment, the Reagan administration deregulated the economy, especially the oil industry, generating new and larger economic ventures with new oil explorations and oil drilling. As a result of these and other measures, the inflation rate, which was at 12.5% in 1980, went down to 4.1% in 1989; unemployment rate was reduced from 10% to 5.4%; and oil prices came down from $35 a barrel (about $100 in today’s dollars) to $22 a barrel by 1988, due to an oil glut.

During the first year of the Reagan administration, the 52 US citizens held captive by Iranian Islamist students in the US embassy since 1979 were released. In 1983, the President authorized Operation Urgent Fury, which was the military invasion of Grenada, an island country in the Caribbean controlled by Cuban troops; the operation was successful as several American students were liberated by the US Marines. In order to bolster and support opposition to the Sandinista Marxist government of Daniel Ortega, the CIA carried out undercover operations to supply the center-right oriented militias, who were known as the Contras, with weapons. He also supported the opposition in communist Poland, led by the labor union leader Lech Walesa, co-founder of Solidarity.

Ronald Reagan increased the military spending, with a massive medium-range missile deployment in West Germany as new nuclear submarines were launched that functioned as mobile launching plataform deterrents, counteracting the Soviet nuclear threats. At the end the Soviet Union could not withstand this new arms race as the Soviet economy collapsed at the end of the Reagan administration: "Mr Gorbachev, tear down the wall," he said in a speech addressed to the Soviet government in 1989.

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