Here is a post by Paul Krugman on his NY Times blog that spells out the real facts:
Reaganite DelusionsThe period from the late 1940s to the end of the 1960s was the golden era for the US. As Krugman points out, taxes on the rich were high, but everybody was sharing in the prosperity so everybody felt good. Under the last 30 years of Reagan "trickle down" economics almost all economic growth as gone to the top 1% with everybody else dog paddling to keep from sinking. It has been an era of "false prosperity" because the bottom 90% got nothing. And with the financial crashes the Republicans have created (the 1990 savings & loan crash, the 2000 dot.com crash, and the 2008 financial crash) everybody is not only financially no better off, they are actually worse off because everybody is much less secure. There are no longer the social safety nets to help in bad times. This is the "paradise" that the political right has delivered. So they are busy re-writing history to hide this 30 year tale of woe.
Michael Boskin has always been a politically ambitious Republican; but he used to know how to read basic economic data. Not anymore, I guess:How does Michael Boskin do math?The delusion that we never had good growth until Reagan came along is very widespread on the right; somehow the whole postwar generation, in which everyone’s incomes doubled, has been erased from memory. But it’s still there in the national accounts:
He writes in the Wall Street Journal this morning:
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The lower marginal tax rates in the 1980s led to the best quarter-century of economic performance in American history.
That’s annual data; surely the case for the miracles of Reaganomics can’t rest on choosing just one quarter in 1982 as a starting point? (And as Richard Green shows, even that doesn’t work). Yes, the numbers starting from the 1930s are high, because growth looks good when you start from a depressed base; but the same is true for 1982, the year beloved by Reaganites.
More broadly, what normal observer, looking at this chart, would see evidence that something wonderful happened beginning in the early 1980s? The good years for US economic growth were those beginning soon after the war — and that growth, very much unlike post-1980 growth, was widely shared with the middle class.
But all that happened with high marginal tax rates and strong unions. Inconceivable! And therefore it must not have happened.