1980 was Carters last year. His presidency was plagued with problems he was only able to partially overcome by the '80 election which "swept" Reagan into office with 28% of the eligible voters voting for him, versus 22% for Carter, . Only 54% of those who could vote actually did. (There was a third candidate as well, a "liberal" Republican, i.e., an old fashioned Republican.)
Reagan's near decade ('81-89) in office brought an ideological sea change to Washington. Gone were the old fiscally conservative, socially liberal Republicans. A new kind of Republican emerged, one fiscally liberal and socially conservative; inverting as it were 154 years of Republican tradition. Reagan and his army of neocons launched an attack on welfare and other perceived government evils such as "regulation"; annihilating, or ignoring, as much of the government regulatory apparatus as they could while growing the defense industry at a breakneck pace to achieve record deficits, all while battling a non-existent communist menace. (The deregulated Savings and Loan Industry, later collapsed.)
The Reaganites were aided and abetted every step of the way, except for one notable exception, by the Democrats who also enthusiastically supported lowering the upper bracket tax rate, first from 70% to 50%, then later to 28%; thus more or less dismantling what was formerly a progressive tax schedule. The Democrats were there in the wings always happy to overlook this little transgression or that, such as ignoring the "War Powers Act" for instance, and allowing the President "plausible deniability" when it was necessary to shift blame onto hapless underlings.
But even though the Democrats were always happy to lend a hand, they don't deserve any of the glory for the surprising amount of innovation introduced by the Reaganites. It was Reagan and his Chicago School economists who were the true "geniuses". Who else could have come up with the novel idea of reducing revenues to increase them? (We know now, of course, that they must have been counting borrowed money as revenue!
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Other than being Bonzo's bedtime buddy, marrying a steadfast believer in astrology, running up unconscionable debt, finding a communist threat everywhere he looked, and having by far the best speech delivery of any U.S. president since the advent of Edison's recording machine, Reagan will always be remembered for his version of "supply side economics" -- an idea that no matter how absurd, refuses to die. Reagan wholeheartedly embraced supply-side economics; though he had no formal training in economics whatsoever, and was without question among the least well-educated of U.S. Presidents. Under Reagan's interpretation of supply-side economics, taxes were slashed. This presumably made them fairer by reducing the gap between rates paid by the rich and the poor, while at the same time having the magical result of increasing revenues! The extra bucks lining the pockets of the rich that would result were expected to spontaneously "trickle down" to the grateful poor, leaving everyone, rich and poor alike, very satisfied.
Of course none of this worked as hoped. Revenues did eventually rise some, after trillions were borrowed and spent on useless military hardware to fight an imaginary communist enemy. The increased revenues, however, came from increased government spending, not tax cuts. The revenues were sadly dwarfed by spending. The huge Treasury shortfall had to be made up by record borrowing. (I can still hear the goings-on in the Oval Office-- "Damn, it seemed to work fine on paper. Well, we can't admit we were wrong. They'll crucify us. Only thing to do is to carry on as though it were a great success.")
Whereas American style capitalism has never been kind to the poor, under Reagan it began to be unkind to the middle class as well! It was Reagan-nomics that began the slow slide of the middle class toward a progressively smaller piece of the prosperity pie. So for example, when Reagan took office the average CEO salary was about forty times that of a typical factory worker. But by the time he left office that ratio had grown from 40 to 99 --more than doubling! In the decade of the '80s, before tax income of the wealthiest 1 % rose 75% while the income of the bottom 40% declined slightly. Meanwhile Reagan was faced with depletion of the Social Security Trust Fund, a buffer against hardship in old age for the lower classes, but a feature of little interest to the wealthy. This was fixed, and resulted in the approximate 3 trillion surplus in the fund today. However by the end of Reagan's time in office, a middle income family making 40K paid about 7.5 % into Social Security and a family making 400K paid about 1.5%.
This is the path that both Republicans and Democrats launched us on during the 1980's. But let's be fair, Reagan deserves all the credit. We continue on that same path today -- with only a little respite having occurred during the Clinton years. And now, with the Republicans fixated on "ruining" the Obama presidency, who knows when these tireless efforts might come to fruition; efforts, unwittingly evil, to turn a once prosperous nation into something resembling the crackpot religious colony it began as, or worse, a plutocracy with many desperate poor, as it was in the early days of the Republic.
