One of the major goals of the presidency of Ronald Reagan was to reduce the size and role of the federal government. His philosophy was summed up in his inaugural speech when he said that the "government is not the solution to our problem. Government is the problem." Reagan and his supporters hoped to usher in a new form of conservatism by championing a more hands-off approach to governing that promoted and rewarded personal responsibility rather than government assistance to those in need. It mixed a socially conservative agenda with pro-business economic policies to form a coalition of blue-collar workers, Evangelical Christians, and business leaders.
Under this approach, Reagan sought to drastically change the country's tax code. He felt that progressive tax systems discouraged economic competitiveness and investment. Reagan felt that reducing taxes for the highest earners in the country would lead to more job creation since they would then invest these savings in their own businesses. New conservatism argued that successful government interventions in the economy would come in the form of these tax cuts to corporations and the wealthy. In both 1981 and 1986, Reagan signed drastic changes in the tax code to reflect this philosophy.
Furthermore, this approach led to numerous deregulations of the stock markets and many industries. Conservatives believed that government regulations often prevented economic growth. During Reagan's presidency, the budgets of many government agencies, such as the EPA and OSHA, were severely cut. The only part of the federal government that saw any significant increase in its budget was the military, which grew immensely during this time. Also, the federal government got out of the business of regulating utility companies, airlines, and savings and loans banks.
This ultimately led to less revenue for the federal government, which meant that federal programs had to be reduced or cut to keep the budget balanced. Many social welfare programs were reduced or eliminated altogether. This was in line with the thinking of these new conservatives, who felt that government assistance discouraged Americans from fully engaging with the economy. There is still debate as to how successful this new approach by the federal government was. The huge increase in the national debt and the widening wage gap in the country over the last four decades is seen by many as evidence that "Reaganomics" was a failure. Others contend that this new economic approach and limited government encourages more economic growth.