Reaganomics (//; a portmanteau of [Ronald] Reagan and economics attributed to Paul Harvey) refers to the economic policies promoted by U.S. President Ronald Reagan during the 1980s. These policies are commonly associated with supply-side economics, referred to as trickle-down economics or voodoo economics by political opponents, and free-market economics by political advocates.
The four pillars of Reagan's economic policy were to reduce the growth of government spending, reduce the federal income tax and capital gains tax, reduce government regulation, and tighten the money supply in order to reduce inflation.
Prior to the Reagan administration, the United States economy experienced a decade of rising unemployment and inflation (known as stagflation). Political pressure favored stimulus resulting in an expansion of the money supply. President Richard Nixon's wage and price controls were phased out. The federal oil reserves were created to ease any future short term shocks. President Jimmy Carter had begun phasing out price controls on petroleum while he created the Department of Energy. Much of the credit for the resolution of the stagflation is given to two causes: a three-year contraction of the money supply by the Federal Reserve Board under Paul Volcker, initiated in the last year of Carter's presidency, and long-term easing of supply and pricing in oil during the 1980s oil glut.