In a recent column for The New York Times, economist Paul Krugman wrote about the ongoing effects of the Reagan era in the United States. In the opinion piece, he refers to an article written by fellow economist Austin Frakt, who dove into the increase of U.S. health spending from the 1980s. In most developed countries, Frakt writes, health spending coincides with the increase in life expectancy. However, for the US, things took a turn for the worse since the 1980s. Healthcare spending began soaring beyond that of other advanced nations, but without the same benefits in life expectancy. Krugman uses Frakt’s findings and uses them to paint a broader picture: he looks at inequality (by Gini coefficient), household debt relative to income soaring and party polarisation. Each of these categories worsened since the beginning of the 80s: inequality increased, household debt rose and political parties became more polarised. His hypothesis on how this happened?
“A good guess, surely, is that the whole story is connected with the rise of modern movement conservatism”, Krugman writes, “which brought with it unequalizing economic policies, retreat from antitrust, financial deregulation, and more.” (source)