I think Scott’s really got something good here.
First he breaks apart Krugman’s attack against the Reagan-era tax cuts (btw, I hate these kinds of characterizations -Reagan wasn’t “the one”, surely. There was obviously a very favourable political climate for this kind of fiscal policy). His basic point is that those countries that didn’t engage in those kinds of tax cuts tended to do much worse. Ergo, the US would have been MUCH worse off had they not occurred. Very well put.
Then he outdoes himself with more evidence about why, exactly, those pre-70s years were so damn good. The basic idea is that there was a backlog of world-beating technologies that each fundamentally changed the way we lived and were all fully implemented during the first half of the 20th century. (think washing machine, airplanes, plumbing, microwave, etc…)
I love these kinds of narratives. So does Krugman, by the way.
Update: Krugman responds without really getting into the fun stuff Scott wrote about. Pity.