The Origins Of GOP Fiscal Policy With A Focus On Tax Cuts

This article provides an historical overview of how the political economy of the GOP became focused on cutting taxes. The original idea was for the GOP to focus on economic growth. Tax cuts were viewed as the way to stimulate economic growth. Moreover, a growing economy would provide the tax base to fund government expenditures. There was no need for the GOP to be branded as the "stingy" political party. Tax cuts were the engine that would fuel economic growth which would INCREASE tax revenues. This was the supply side vision of fiscal policy that was sold to Ronald Reagan. Tax cuts are a gift and so is economic growth that funds government programs.

The Ryan budget plan shows how the original supply side vision of GOP fiscal policy has morphed into something else. Tax cuts have become the means to limit government provided social welfare programs. This is Grover Norquist's "starving the beast" concept. The GOP should become a stingy Santa. It should provide the gift of tax cuts, but be stingy about non-defense spending.

This strategy works if the public becomes fearful of budget deficits, and if the public believes that social spending benefits "underserving" Americans. The Tea Party appears to like this strategy. We will have to see whether it has legs with the rest of the electorate.