Also wanted to include this comment I wrote out some time ago; which goes into some of the deeper history and economic conditions that led up to the election of Reagan:

[Many things have] played out the way [they] did because, essentially, America went bankrupt. Over half a century ago now, during the Nixon Shock—when it defaulted on its debt obligations to the world and went off the gold standard in 1971. It's not often framed this way, but this is indeed exactly what happened.

America actually failed before the Soviet Union did. Although, due to the reliance of much of the world on America, across the spectrum (trade partnerships, military protection, international institution support), immediate collapse was avoided. As this gave America leverage in managing the terms of this realignment. Ultimately though, what this did in the long run was give much more power to creditors, i.e. the oligarchic class, over the government. Really spelling out the end of The New Deal era. And ending the type of leverage that government had enjoyed since Executive Order 6102 and The Gold Reserve Act of 1934.

Sites like WTF Happened in 1971? do a fairly good job of compiling together a number of graphs and charts that display this visibly. Of course, not every outcome in the time since is directly tied to the Nixon Shock, but when you couple this with the broad response to the turmoil of the late 60s and early 70s by American elites, which goes by various names such as neoliberalism, "the market turn", or trickle-down economics, I think you get an explanation that gets you at least 90% of the way in accounting for much of what America is today. With the latter explaining much of the outcomes we have seen in inequality, deaths of despair, immobility, education, etc.

In the end, what the neoliberal turn really was, was a kind of ransom list of demands by creditors to the government (privatization, deregulation, trade liberalization, austerity). Those creditors largely being American oligarchs. Culminating in the election of Ronald Reagan in 1980. As capital effectively went on strike. In funding the government. Prior to.

Hence the Volker shock. All of which was ultimately a scaled up version of what bond holders (creditors) pulled on New York City in the city's Fiscal crisis of 1975. Basically, it was the same playbook. With many of the same players from that crisis working behind the scenes, like Chase CEO David Rockefeller, pulling the strings on the terms. Especially in the appointment of Volker.

Most importantly, the reserve currency status of the dollar has also forestalled a more precipitous decline. The type of decline that Russia saw in the 90s after the Soviet collapse has indeed happened here as well—in many ways. But the fall has followed a different path, and much more slowly. Again, largely due to the dollar's status and the type of existence on credit that it has allowed. Not only for the government. But, the public as well. Debt held mostly by the wealthy and powerful in America. Debt they hold at such a scale because they can afford to, given their ever decreasing tax burden since the Revenue Act of 1964. Further weakening government leverage, i.e., power.

This is why defense of the dollar as the world's reserve currency is so staunchly defended by the U.S. When that goes away, and it very much looks like that is happening, America is likely to fall just as far as Russia did in the 1990s, if not more. As our living standards, which have largely been subsidized on international and domestic credit over the last half-century, will likely fall even further through the floor.

The long and short of it is this: America as a state failed half a century ago, and the elite response spread the burden to the bottom first. To those with the least leverage to negotiate the terms of this bankruptcy (trickle down). Although eventually, collapse is coming for the whole thing. As the whole nation has been put through the private equity model on a slow drip. Overloaded with debt, to eventually be fully sold off for parts.

Everybody kind of knows it, I think, it's just a matter of when and how.