Did the US enjoy a much sounder economic foundation in the late 1960's/early 1970's than we presently have? Why or why not?

The economic foundation circa 1970 was pretty shaky. In 1971, Nixon severed the relationship between the dollar and gold, which had severely restricted the ability of the economy to grow.

But at the time, the financial markets did not have a very effective way to combat inflation.1971 in particular was awful, with Nixon imposing wage and price controls in order to “stabilize” the economy. And other disruptions were caused because foreign exchange was restricted.

Since then there are futures markets for a variety of financial instruments which reduce risk and make economists better able to anticipate disruptions.

^^Some economists point to 1971 as the year that the U.S. net debt was greater than our ability to pay it on time and therefore mark that year as when we effectively became a debtor nation for the first time since WWI. The causes were numerous, but the largest expenditures were for our military adventures abroad, which can be described as imprudent at best. Our involvement in the Vietnam War cost us approximately $1 million per minute for ten years (1967 dollars) beginning in January 1964 when we inserted an ever-increasing amount of Armed Forces regulars into the country, peaking at 250,000 in the summer of ‘68 (this figure does not include the massive Naval and Air support from offshore aircraft carriers and long-range support from Clark AFB and Subic Bay in the the Philippines, and the SAC B-52 bases in Guam, nor the black ops personnel operating in Thailand, Cambodia and Laos). This among other things, as mentioned by @zenvelo above, exacerbated an economy already beginning to feel the effects of growing European and Japanese exports into markets formerly dominated by the US.

Apparently, however, there are different ways of measuring whether or not we actually are a debtor nation and therefore there are arguments as to precisely when we became a debtor nation.

According to this New York Times Business Day article from 16 Sept. 1985, the US not only became a debtor nation for the first time the day before on 15 Sept. 1985, but went from the world’s greatest lender, to its greatest borrower:

“Massively reduced taxation under Reagan resulted proportionally in massively decreased Government revenue. This was just as most mainstream economists and common sense thinkers had predicted.

“To make things worse, to go along with this sharp reduction in the Government’s tax income, the Reagan administration simultaneously increased military spending—to levels the world had never seen. The combined reduction in Government income and increased expenditures overseas, and the consequent need for massive borrowing to make up the shortfall, transformed the U.S. virtually overnight from the world’s biggest net lender to the biggest net debtor.”

We are still a debtor nation today. This hasn’t changed. Based on this, I would say that, no, we do not enjoy a sounder economic foundation today than we did in the 1960s.

The answer is a resounding “Hell Yes”. And the basic reason is simply the depth and strength then of our manufacturing and industrial sectors. It was an era in which the standard of living in the country was still on the rise, though the effect may simply have been due to inertia. Trends were certainly afoot then pointing toward the reversal of all the “salad days”.

And here it is difficult to overstate the significance of the Vietnam war, which prior to Iraq was the single greatest strategic blunder in the history of the country. The ambitious expansion of the poverty programs coupled with the war marked ours as the land defying the old maxim about guns or butter. I too believe those years to be crucial, because disguised in the hooplah and noise was the basic question of how the wealth was to be distributed when the time of plenty ran out. The election of Ronald Reagan settled that issue definitively, and as an appropriate herald of what was to come, armies of homeless people erupted overnight seemimgly from city sidewalks.

The US had a huge advantage in after World War II, being separated by oceans from the devastation. All the other leading industrial nations were just coming back up to speed in the 1960s. None of the developing nations like China and India competed at all.

So partly the US “decline” has been more the rest of the world moving up to the front of the line with us.

Most families in the 60’s ( I grew up in the 60’s ) were still able to not only get by, but thrive on a one paycheck household and be able to afford a home, cars, maybe a boat, family vacations and still save for retirement, while raising multiple kids too. Those days are ancient history and my answer, politics aside, is hell yes, to parrot @stanleybmanly .