In my opinion, you forgot something significant in your argument that Reagan destroyed america. Reagan had a boogie man that allowed the american public be con-ned. Reagan's "reason" for blowing up the deficit and really set the mold for the republicans was his cold war with the Soviet Union. They were made out to be the perfect boogie men. Communists who were "over there" and had tons and tons of nuclear weapons. Reagan's sales pitch was to build up the military with all the deficit spending. He cut taxes and social programs at the same time. Now you have a president and a party who looked militarily tough and who cut the taxes for the american public. Not only that but he put all that money into the military-industrial complex which then gave them the political and financial power to keep things that way indefinitely. They were and are using the same rhetoric now. The only thing which has changed is the identity of the boogie man. Reagan did manage to be in office when communism fell which gave him (correctly or not) credit for that. That was the only mistake the republicans made. There no longer was a boogie man.
In my opinion, thats the only reason why Clinton succeeded into the presidency because the americans couldnt buy into Libya, Iran or Iraq as being the new boogie men. Reagan had built up the military into such a force that these other countries were no match. Americans knew it. George W got lucky and found a new boogie man in Iraq and the Islamic-extremists. The republicans have succeeded into creating a new boogie man which is hard to find, hard to fight in a war that will never be over because there's no country or landmark to take over. Every succeeding President now has to keep the perception that we need a military built up and our presence maintained to keep us safe. As long as the military budget is kept at this rate our country will never recover from the deficit spending even if the tax cuts are allowed to expire.
This is what President Obama's focus should be. Eliminating the fear of the boogie man. Cutting the military budget, but not from a position of weakness. I would recommend that he use the premise of protecting our borders here at home. The key however, is to bring back all of our troops back to the states and have the military personal help rebuild our infrastructure by contributing to the security AND contributing to the labor but say its for national security. We can all agree our aging bridges, roadways, railways, ports and subways are all key to our economic security and stability. All of these means of transportation and trade need to be rebuilt. I would like to see the CONServatives try to fight that. Since the CONServatives have always run on a fear campaign then the Democrats should turn it against them.