You could make a similar argument that it was the Reagan tax cuts that pulled us out of recession, but it would (a) be oversimplistic to primarily attribute the recovery to that single event and (b) it would be confusing correlation with causation.
Just a coincidence?
Not a coincidence at all.
What I find fascinating about most people's understanding of macro economics is that they have, for [-]partisan political[/-] some reason, decided to only look at the Supply Curve or the Demand Curve of the economy. They ignore the big picture where equilibrium is formed at the point those two curves cross and that disequilibrium can be caused by either side.
So if you have a situation where supply constraints impede economic growth, the proper course of action is to remove those constraints. Evidence of a Supply constrained slump is elevated inflation in the face of high unemployment. That sounds a lot like the late 1970’s. And indeed, an oil embargo, high taxes and high regulation constrained supply. In that environment loose money only served to accelerate inflation. Given that backdrop, the proper policy response was to break the oil embargo, cut taxes, remove regulatory barriers to economic growth, and tighten monetary policy.
Fast forward to today, and the economic difficulties look nothing like those of the late 70’s. Instead of a supply constrained economy, our economy suffers from excess supply and inadequate demand. The big picture symptoms of a demand constrained economy are high unemployment and falling inflation, which is what we have today.
It’s telling that nearly all of the economists and pundits who predicted run away inflation because of monetary easing also suggest that reduced taxes and regulation are the keys to recovery. They’ve fundamentally misdiagnosed the problem because they only see the world through the supply side of the equation. They still think it's 1979. So they're stunned as inflation continues to fall in the face of unprecedented monetary expansion and contort themselves in various directions to explain it when the answer is simple. Aggregate demand collapsed. Period. Full stop.
The proper policy response in the face of inadequate demand is loose monetary policy, and yes, direct government spending. Building, or encouraging, more supply in an oversupplied market is counterproductive. Deregulation, marginal tax cuts, tight money ect. etc. do nothing to address the problem of inadequate demand, and in the case of tight money, actually make it much worse. Why are these things even being suggested in some quarters?
This isn’t rocket science and it doesn’t have to be partisan. It’s possible for Reagan’s policies to be correct for the problems he faced, but entirely inappropriate to those of today. It’s O.K. to recognize that. It happens to be the actual world we live in. But some people have drawn the wrong conclusions from Reagan's success. Some have gone so far as to adopt a world view that government action is everywhere and always evil, and therefore have come out against it, even in cases where it is necessary and beneficial. They seem especially hostile to those cases where it has been wildly successful, like TARP.
Reminds me of Venezuela
