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Reagan’s desire to aid the Contras even after Congress ended its support led him, surprisingly, to Iran. In September 1980, Iraq had invaded neighboring Iran and, by 1982, had begun to gain the upper hand. The Iraqis needed weapons, and the Reagan administration, wishing to assist the enemy of its enemy, had agreed to provide Iraqi president Saddam Hussein with money, arms, and military intelligence. In 1983, however, the capture of Americans by Hezbollah forces in Lebanon changed the president’s plans. In 1985, he authorized the sale of anti-tank and anti-aircraft missiles to Iran in exchange for help retrieving three of the American hostages.

A year later, Reagan’s National Security Council aide, Lieutenant Colonel Oliver North, found a way to sell weapons to Iran and secretly use the proceeds to support the Nicaraguan Contras—in direct violation of a congressional ban on military aid to the anti-Communist guerillas in that Central American nation. Eventually the Senate became aware, and North and others were indicted on various charges, which were all dismissed, overturned on appeal, or granted presidential pardon. Reagan, known for delegating much authority to subordinates and unable to “remember” crucial facts and meetings, escaped the scandal with nothing more than criticism for his lax oversight. The nation was divided over the extent to which the president could go to “protect national interests,” and the limits of Congress’s constitutional authority to oversee the activities of the executive branch have yet to be resolved.

Visit the Brown University site to learn more about the Iran-Contra congressional hearings. Read transcripts of the testimony and watch the video of President Reagan’s address to the nation regarding the operation.

The cold war waxes and wanes

While trying to shrink the federal budget and the size of government sphere at home, Reagan led an unprecedented military buildup in which money flowed to the Pentagon to pay for expensive new forms of weaponry. The press drew attention to the inefficiency of the nation’s military industrial complex, offering as examples expense bills that included $640 toilet seats and $7,400 coffee machines. One of the most controversial aspects of Reagan’s plan was the Strategic Defense Initiative (SDI), which he proposed in 1983. SDI, or “Star Wars,” called for the development of a defensive shield to protect the United States from a Soviet missile strike. Scientists argued that much of the needed technology had not yet been developed and might never be. Others contended that the plan would violate existing treaties with the Soviet Union and worried about the Soviet response. The system was never built, and the plan, estimated to have cost some $7.5 billion, was finally abandoned.

Anticipating his reelection campaign in 1984, Reagan began to moderate his position toward the Soviet Union, largely at the initiative of his new counterpart, Mikhail Gorbachev. The new and comparatively young Soviet premier did not want to commit additional funds for another arms race, especially since the war in Afghanistan against mujahedeen—Islamic guerilla fighters—had depleted the Soviet Union’s resources severely since its invasion of the central Asian nation in 1979. Gorbachev recognized that economic despair at home could easily result in larger political upheavals like those in neighboring Poland, where the Solidarity movement had taken hold. He withdrew troops from Afghanistan, introduced political reforms and new civil liberties at home—known as perestroika and glasnost —and proposed arms reduction talks with the United States. In 1985, Gorbachev and Reagan met in Geneva to reduce armaments and shrink their respective military budgets. The following year, meeting in Reykjavík, Iceland, they surprised the world by announcing that they would try to eliminate nuclear weapons by 1996. In 1987, they agreed to eliminate a whole category of nuclear weapons when they signed the Intermediate-Range Nuclear Forces (INF) Treaty at the White House ( [link] ). This laid the foundation for future agreements limiting nuclear weapons.

Questions & Answers

Ayele, K., 2003. Introductory Economics, 3rd ed., Addis Ababa.
Widad Reply
can you send the book attached ?
Ariel
?
Ariel
What is economics
Widad Reply
the study of how humans make choices under conditions of scarcity
AI-Robot
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn Reply
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn
what is ecnomics
Jan Reply
this is the study of how the society manages it's scarce resources
Belonwu
what is macroeconomic
John Reply
macroeconomic is the branch of economics which studies actions, scale, activities and behaviour of the aggregate economy as a whole.
husaini
etc
husaini
difference between firm and industry
husaini Reply
what's the difference between a firm and an industry
Abdul
firm is the unit which transform inputs to output where as industry contain combination of firms with similar production 😅😅
Abdulraufu
Suppose the demand function that a firm faces shifted from Qd  120 3P to Qd  90  3P and the supply function has shifted from QS  20  2P to QS 10  2P . a) Find the effect of this change on price and quantity. b) Which of the changes in demand and supply is higher?
Toofiq Reply
explain standard reason why economic is a science
innocent Reply
factors influencing supply
Petrus Reply
what is economic.
Milan Reply
scares means__________________ends resources. unlimited
Jan
economics is a science that studies human behaviour as a relationship b/w ends and scares means which have alternative uses
Jan
calculate the profit maximizing for demand and supply
Zarshad Reply
Why qualify 28 supplies
Milan
what are explicit costs
Nomsa Reply
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials
AI-Robot
concepts of supply in microeconomics
David Reply
economic overview notes
Amahle Reply
identify a demand and a supply curve
Salome Reply
i don't know
Parul
there's a difference
Aryan
Demand curve shows that how supply and others conditions affect on demand of a particular thing and what percent demand increase whith increase of supply of goods
Israr
Hi Sir please how do u calculate Cross elastic demand and income elastic demand?
Abari
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Source:  OpenStax, U.s. history. OpenStax CNX. Jan 12, 2015 Download for free at http://legacy.cnx.org/content/col11740/1.3
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