The US has had two major forms of growth in the last 70 years.
1. Postwar Keynesianism, which stimulated middle class demand. It did this partly through the fed which was charged with maintaining full employment through a variety of mechanisms, including expanding the monetary base and lowering interest rates. But the most famous form of Keynesian spending was the Military Keynesianism that brought us out of the Great Depression. This is when the Government spent trillions on war manufacturing and put everyone to work. This had an immense multiplier effect because all the government workers had money to spend. And when workers have money, the capitalist has an incentive to add jobs in order to capture that money. And when the capitalist adds jobs, there are even more spenders, which leads to a virtuous cycle of adding ever more jobs to capture all the additional consumption.
Milton Friedman famously undermined Postwar Keynesianism by showing how it lead to inflation and then stagflation, which had the opposite of the intended effect.
Uncle Milty's defeat of the postwar model lead to the Supply Side revolution, which shifted government's roll from boosting middle class demand to helping the suppliers through tax and regulatory reform. So we imposed austerity on the middle class in order to make room for tax cuts on top, hoping that this would increase investment, innovation, and job growth. [Of course, the promised cuts in government spending turned out to be misleading because Reagan famously doubled spending: for every dollar he slashed from a social program he put $10 into military spending. This was actually not all bad, as the Democrats claim. Places like San Diego and Orange county saw major job growth from Reagan's military Keynesianism.]
Unfortunately, by divesting in middle class support (cutting all their programs and lowering their wages to make business more competitive), we had to find another way to stimulate consumption.
2. The Reagan expansion of credit. After Reagan (and later Clinton) freed capital to go after higher returns through 3rd world labor markets (and thus shipping manufacturing jobs to freedom-hating places like China), and after Reagan imposed austerity on the middle class in order to make room for tax cuts to the wealthy, America faced a demand problem: that is, having lost wages, benefits, and government programs, workers lacked the money to consume? So how did Reagan fix the demand problem? Answer: credit, i.e., debt based consumption. Don't take my word for it. Check out the expansion of household debt starting in the 80s. America went on a 30 year spending (debt) binge called Morning in America. This is why we all started receiving 3 credit cards a week.
Unfortunately, by over-extending credit for 30 years, we ended up breaking the bank. We now have too much consumer debt along with too many destroyed families from the bursting of the housing bubble > > > and the result is: consumers are broke and can't borrow another dime. So the great Reagan credit stimulus is over
(Now we have nothing to fuel the economy. We can't go back to the Keynesian model because the Right will not allow it - and the Democrats are powerless wimps with no courage)
If Obama originally had the courage to ignore health care and use all his political capital to do a real stimulus - like the government spending on WWII that brought us out of the Great Depression - we may have seen some growth. But the Republicans would never have let that happen, which is why the stimulus was so small, and why most of it was tax cuts. Of course, if we begin to see growth, we will run into the other problem caused by Reagan: high gas prices. Carter begged the nation to get off oil because the military costs of stabilizing the middle east are too high, and the rising demand of China, India, and the developing world would lead to prices so high that they would kill any economic growth. Reagan, owned by big oil, convinced the nation that Carter was crazy and oil would be plentiful for ever. (Wait 'till people see the cost of oil from tar sands or shale fracking. If you think we're in a depression now, just wait until we get to the expensive oil)
America swallowed poison in 1980. We are almost dead.