There is a new book out exploring the Reagan myth and how it was created.
Reagan's legacy; the idea that he "won" the Cold War, saved the United States economy and was widely loved and popular is one of the great deceptions of the late 20th Century. The myth was created and lives on for a specific purpose however: to rally the reactionary base to the cause of jingoism and upward transfer of wealth.
Ronald Reagan cut his political teeth ratting on his fellow actors during the Red Scare. He then moved on to schilling for General Electric as a front man for their television program and special brand of "can do" individualism and upbeat Americanism, in other words he was a corporate whore telling the masses that they too can pick themselves up by their bootstraps and to watch out for the commies.
After a very lucrative run as front man the ambitous Reagan decided he could do that job and decided to run for Governor of California. In the late 1960's Reagan appealed to the wounded white man who saw hippies burning flags, soldiers shooting up heroin and villages, women and gays demanding equality and most importantly Black Panthers carrying guns and feeding children milk and cereal in Oakland while preaching off the pigs and reading Mao's little red book. This was too much for the Frank Sinatra set who wanted to go back to the time of Ozzie and Harriet and segregation. The whole world seemed to becoming undone and we needed a leader to bring it all back home. Reagan's lock em up and don't tax the property owners of California made him a darling of the Right in the 70's as many of the County Club set started to flirt with Nixon and Ford's brand of regulation and Detente.
It was the Paul Volker's depression however that allowed the barbarian to enter the gates of the White House. To tame the beast of inflation the monetarists unleashed there most lethal weapon: a massive rise in interest rates (a weapon that works a lot better in forward than reverse). This "shock therapy" decimated the industrial base, and the predominantly white unionized workforce of the said industries, which massively undermined the Democratic base that was built by FDR. The Democratic coalition was already under massive stress because LBJ had embraced the Civil Rights movement by helping pass the Civil and Voting Rights Acts but Volker's (current Chairman of Obama's Economic Recovery Advisory Board) depression undermined the Democrats so fully that even the seemingly extremist Reagan was able to squeak out a victory in 1980.
Reagan's policies can most succinctly be summed up in a slogan: don't tax and spend alot. His policies, now trumpeted by the great enemy of government and taxes Grover Norquist, set the stage for the trillions of dollars we now owe the banks and governments of the world that buy our treasury bills. The so-called anti-government aspects of Reaganism were only for the poor, the rich used the government, particularly the Defense Department and the IRS to re-distribute wealth upwards. Neglegence towards environmental, workers rights, safety and health and financial regulation also help keep the wealthy fat as they were now less occupied with pesky laws like the Wagner Act or banking regulation.