Assuming that overspending in those years resulted from someone's knowing defection--a bunch of someones, actually-- the dispute over who is at fault for the Reagan-era deficit illustrates why politicians are such practiced defectors in the prisoner's dilemma: the future has no shadow whatever, because it is impossible to assign fault for a defection. You cannot punish a defection unless you know who the defector is.
Politicians in Congress are actually playing two simultaneous games, one with each other, one with the voting public. The game they play with each other tends to be a much more cooperative one, because the future casts a much larger shadow. Congressmen have no trouble identifying defectors: you didn't vote for my bill, so I won't vote for yours. To the extent that this kind of cooperation helps to get work done, term limits would have been a bad idea, dissipating the shadow of the future by ensuring that Congressmen would serve only a short time.
It is in the game played with the public that repeated defection is possible because of the difficulty of assigning responsibility. When a bad action is taken, it is decided, diffusely, by one group of people, whose votes, even if recorded, are often not known to their constitutents; implemented by another; and judged by a third. The politicians therefore have two other branches of federal government, or numerous state governments, to blame, if something fails.
Also, it takes a very long time to see the consequences of decisions, even when the responsibility for their making is clear. The Gramm-Rudman law, passed during the Reagan years, was touted as the solution to the deficit. It contained loopholes, which Congress ably exploited, so it was completely ineffective in reducing the deficit; but only today, more than ten years later, do we know this. In the meantime, Senator Gramm, who had all the credit then, runs for president today without any of the blame for a failed effort which most do not remember (he would doubtless blame the Democrats for the failure of his concept anyway.)
Political discourse usually avoids discussing, or simply denies, the long term consequences of the decisions being advocated. Though a surprisingly large percentage of political decisions may bring about someone's death, almost never is it conceded. Those who want to eliminate the FDA might honestly say that they believe the deaths this will cause are relatively unimportant, an acceptable trade-off for the benefits of a free market; but they never do say this. They simply deny there will be deaths, as do the advocates of shackling the EPA or of repealing the ban on semi-automatic weapons. Instead of a cost benefit analysis, where my freedom from pollutants or bullets is balanced against the profits to be made by campaign contributors, the grossly oversimplified claim is that any given legislative decision is all benefit, no costs. And thus the future can have no shadow.
Harlon Carter, the man who led the NRA to the extreme right, once was asked how he felt about the purchase of legal handguns by criminals and the unbalanced. His answer: it is "the price we pay for liberty." No-one at the NRA today would be honest--or stupid-- enough to admit that there is any price. The litany today: guns don't kill people. Guns have no cost. The future has no shadow.
Honest discourse about consequences promotes the shadow of the future, forcing politicians into cooperation with the public and eliminating the benefits of defection. But, to get there from here, the public must acquire a longer memory for responsibility and consequences.