In the eighties, Reagan dealt with all of this by cutting taxes on corporations, attacking labor, eviscerating social services, and so on. As a result, by the mideighties, profit rates had been restored, labor had been cowed, and the cost of maintaining the state had been shifted from business to everyone else. But this transformation created a massive new wave of poverty, and the war on drugs was a response to these newly reemerging class distinctions. It served to segregate and contain the dangerous classes. Though the poor were not rebelling, they were still a threat.
Poor people threaten the system's legitimacy in that they make the social structure appear unjust.
They also pose an aesthetic threat, scaring and disturbing the moneyed classes by showing up in inconvenient places. And whether or not poor people are, at the moment, organized and rebelling, there's always the threat that they will. So, with Reaganomics, we again find massive resources being poured into policing. That's sometimes necessary, but, fundamentally, helping the poor means empowering labor, which means higher costs and lower profits for business. Otherwise the working class would be able to demand more and more of the economic pie, and profits would drop.