The Reagan tax cuts appeared to usher in a period of properity but only because the were accompanied by an immediate increase in military spending and a big arms build-up, all funded with borrowed money. When the deficit doubled, unemployment hit 6% and the stock market crashed, Reagan decided that maybe the tax cuts weren't such a good idea, and he raised taxes substantially. Look at the economic numbers. Up uptil 1980, wages kept pace with inflation - afterward 1880 working class wages stagnated Up until 1980, the working class had savings. After 1980, those savings started to erode Similarly, middle class savings and wages started to erode after 1980 The transfer of the wealth to the top 5% began in 1980. In 1987 the stock market had it's biggest crash since the Great Depression - 6 years after Reagan cut taxes and deregulated businesses. 8 years after Bush cut taxes and deregulated businesses, there was an even bigger market crash. The second market crash was much harder on the US economy because of the steady erosion of savings which was the result of 30 years of wage stagnation. People cut back on luxuries, took second jobs. But the working class has exhausted its savings, and maxxed out its credit cards, and has been living paycheck to paycheck for quite some time. The middle class hasn't been thoroughly drained yet, but it's getting far too close.