<P> In 1981, Ronald Reagan introduced Reaganomics . That is, fiscally expansive economic policies, cutting marginal federal income tax rates by 25% . Inflation dropped dramatically from 13.5% annually in 1980 to just 3% annually in 1983 due to a short recession and the Federal Reserve Chairman Paul Volcker's tighter control of the money supply and interest rates . Real GDP began to grow after contracting in 1980 and 1982 . The unemployment rate continued to rise to a peak of 10.8% by late 1982, but dropped well under 6% unemployment at the end of Reagan's presidency in January 1989 . </P> <P> 20 million jobs were created under Reagan's presidency--which were made up of 82 percent high - paying and long - term jobs . From 1982 to 1987 the Dow Jones Industrial Average gained over 1900 points from 776 in 1982 to 2722 in 1987--about a 350% increase . An economic boom took place from 1983 until a recession began in 1990 . Between 1983 and 1989 the number of people below the poverty line decreased by 3.8 million . </P> <P> The boom saw the increasing popularity of electronic appliances like computers, cell phones, music players and video games . Credit cards were a symbol of the boom . The Reagan tax cuts seemed to work and Americans were able to shrug off the crash of 1987 by the beginning of 1988 . The growth ended by 1990 after seven years of stock market growth and prosperity for the upper and middle class . The federal debt spawned by his policies tripled (from $930 billion in 1981 to $2.6 trillion in 1988), reaching record levels . </P> <P> Though debt almost always increased under every president in the latter half of the 20th century, it declined as a percentage of GDP under all Presidents after 1950 and prior to Reagan . In addition to the fiscal deficits, the U.S. started to have large trade deficits . Also it was during his second term that the Tax Reform Act of 1986 was passed . Vice President George H.W. Bush was elected to succeed Reagan in 1988 . The early Bush Presidency's economic policies were sometimes seen as a continuation of Reagan's policies, but in the early 1990s, Bush went back on a promise and increased taxes in a compromise with Congressional Democrats . He ended his presidency on a moderate note, signing regulatory bills such as the Americans With Disabilities Act, and negotiating the North American Free Trade Agreement . In 1992, Bush and third - party candidate Ross Perot lost to Democrat Bill Clinton . </P>

How has the united states system of government contributed to the economic success of the country