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From 1940 to 1980, the United States enjoyed robust economic expansion with high GDP growth and relatively low government debt. However, since 1980, GDP growth has slowed, government debt has soared, and the economic power of the middle class has eroded.

To date, no consensus solution has emerged. Some Democrats believe expanding government services can fix these systemic issues, while many Republicans advocate for scaling back healthcare and retirement benefits for the middle class. I call my proposal “Calibrationism”, a two-year structural adjustment to reset the economy to pre‑1980 norms.

What is Calibrationism?

Definition: Government’s primary role is to “calibrate” the economy—setting parameters based on historical performance. It identifies optimal past conditions and actively maintains similar ratios today.

This document demonstrates why GDP growth has averaged only 2.6 % since 1980, despite massive debt‑financed government spending, and how we can restore high growth, lower debt, and revive the middle class.

Author’s Perspective

I’m Jay Gianukos, a documentary filmmaker with degrees in political science. I became intrigued by the housing affordability paradox: If people can’t afford homes, prices should fall—but they didn’t. The cause? Income inequality: total buying power remains constant, but wealth flows upward, leaving the same number of buyers in a concentrated minority.

Income Inequality: Then vs. Now

According to Pew, from 1940–1980:

• Bottom 20 % of earners received ~10 % of total income
  
   
• Middle 60 %: 60 %
  
   
• Top 20 %: 30 %
  
   

Today:

• Middle 60 % earn about 40 % of total income—down ~1/3 since 1980.
  
   So, someone earning today’s median ~$70 k should make over $100 k if 1980 ratios held.
  
   

What Changed Post‑1980?

Competitive pressures led large corporations to chase top talent—executives, engineers, lawyers—offering inflated compensation by cutting costs elsewhere: middle-class salaries, pensions, and healthcare.

Economic Growth & Debt: The Numbers

• Average GDP growth from 1940–1980: ~4.3 %
  
   
• Since 1980, real growth has averaged just 2.6 %
  
   

That’s roughly 1 percentage point slower than the full 20th-century average of 3.6 %. This persistent slowdown occurred even with mounting debt and increased federal spending ().

Meanwhile, federal debt exploded:

• Post-WWII peak (1945): ~115 % of GDP
  
   
• By the 1960s, debt was ~41 % of GDP  .
  
   
• As of Q1 2025: ~121 % of GDP ().
  
   
• Gross federal debt reached ~119 % of GDP in 2023 ().
  
   

Bottom line: trillion-dollar deficits pumped cash into the economy—but GDP growth lagged behind—and the middle class continued losing ground.

Social Spending & Debt

With rising elderly and healthcare costs, government stepped in with Social Security, Medicare, Medicaid, and Obamacare. These programs, funded by borrowing (not taxes), now constitute about 70 % of the federal budget (source: author’s estimate).

The NFL Analogy

The NFL solved a similar problem in 1993: to prevent richer teams from dominating, it mandated revenue sharing and salary caps, guaranteeing ~50 % of league revenue to players equally across teams.

📈 Outcome: The NFL’s revenue grew from $4 billion in 2000 to $19 billion today, while baseball—a league without such parity—stagnated around $11 billion ().

The message: Competition thrives when structural balance is enforced.

Calibrationism in Practice

1. Tax Incentives: Companies get a 10 % tax cut if middle-60 % of employees receive 60 % of total payroll. Penalties apply for deviation.
   
    
2. This encourages firms to direct more resources to middle-income workers—enhancing retirement and healthcare—reducing government burdens.
   
    
3. Firms and workers share incentives: only through productivity do raises occur, boosting competition and growth.
   
    

Projected outcomes:

• $30 k more per middle-class worker (from restored pay share)
  
   
• Renewed GDP growth to ~4 %
  
   
• Larger economy: a $30–$33 trillion economy today versus ~$25 trillion.
  
   
• Even top earners benefit via asset appreciation.
  
   

Conclusion

Adam Smith’s metaphor—“A rising tide lifts all boats”—relies on rising GDP. Calibrationism realigns pay distribution to ensure growth benefits are broadly shared. Like the NFL, we can set structural rules so performance—innovation, efficiency—determines outcomes. Restoration of a functional economic ladder leads to sustainable, inclusive prosperity.

Summary of Key Corrections & Citations

• Historical GDP Growth: 1940–1980 ~4.3 %, 1980–present ~2.6 % ().
  
   
• Debt-to-GDP:
  
   
  • 1945 ~115 %
    
     
  • 1980 ~26%
    
     
  • Q1 2025 ~121 %
    
     
• NFL vs MLB revenues show clear benefits of enforced competitive balance  .
  
   

Let me know if you’d like deeper analysis on any section!

JayGianukos@gmail.com

(310)435-5368

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