Republicans say there are lessons about economic policy to be learned from Reagan's presidency. It's true, there are, in particular the benefits of "Reagan-style Keynesianism":
Reagan Was a Keynesian, by Paul Krugman, Commentary, NY Times: There’s no question that America’s recovery from the financial crisis has been disappointing. ... And Republicans are, of course, trying — with considerable success — to turn this ... to their political advantage.
They love, in particular, to contrast President Obama’s record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding over a strong economic recovery. You might think that the more relevant comparison is with George W. Bush, who, at this stage of his administration, was — unlike Mr. Obama — still presiding over a large loss in private-sector jobs. And, as I’ll explain shortly, the economic slump Reagan faced was ... much easier to deal with than our current depression. Still, the Reagan-Obama comparison is revealing... So let’s look at that comparison, shall we?
For the truth is that ... Reagan, not Obama, was the big spender. While there was a brief burst of government spending early in the Obama administration — mainly for emergency aid programs like unemployment insurance and food stamps — that burst is long past. Indeed, at this point, government spending is falling ... at a rate not seen since the demobilization that followed the Korean War. ...
In short, if you want to see government responding to economic hard times with the “tax and spend” policies conservatives always denounce, you should look to the Reagan era — not the Obama years.
So does the Reagan-era economic recovery demonstrate the superiority of Keynesian economics? Not exactly. For, as I said, the truth is that the slump of the 1980s — which was more or less deliberately caused by the Federal Reserve, as a way to bring down inflation —... could be and was brought to a rapid end when the Fed decided to relent and cut interest rates... That option isn’t available now because rates are already close to zero.
As many economists have pointed out, America is currently suffering from a classic case of debt deflation: all across the economy people are trying to pay down debt by slashing spending, but, in so doing, they are causing a depression that makes their debt problems even worse. This is exactly the situation in which government spending should temporarily rise to offset the slump in private spending and give the private sector time to repair its finances. Yet that’s not happening.
The point, then, is that we’d be in much better shape if we were following Reagan-style Keynesianism. Reagan may have preached small government, but in practice he presided over a lot of spending growth — and right now that’s exactly what America needs.