Reagan planned to cut taxes for the wealthy in the hope that these taxpayers would then invest their surplus money in business; this, Reagan believed, would reduce unemployment. Reagan also sought to raise interest rates to curb inflation, cut federal spending on social programs, and deregulate industry. Finally, Reagan hoped—but ultimately failed—to balance the federal budget.
After Congress ended support for the Nicaraguan Contras, President Reagan sought other sources of funding for them. Lt. Col. Oliver North then oversaw a plan by which arms would be sold to Iran and the money received from the sales would be sent to fund the Contras.