Ronald Reagan was elected President in 1980. He defeated incumbent Jimmy Carter by winning 44 out of the 50 American states. During the Reagan Era, the country was facing through inflation, a bad economy, and the American foreign policy were not as good. When Ronald Reagan became president, he signed the Economic Recovery Tax Act of 1981 which lowered taxes for corporations, supposedly so they could reinvest the surplus profits back into business. During Reagan's presidency, he expanded the American military creating more jobs, but also raising the deficit due to overspending. During his first term, the economy went from a 4.5% to 7.2%.