The sober, non-partisan Congressional Budget Office (CBO) projects that over the next ten years (2025-2034) the “One Big Beautiful Bill” will increase the federal debt by $3.0 trillion dollars. The increase in the national debt comes largely from tax cuts for the wealthy—a fact that Republicans really, really don’t want to talk about. Instead, they want to highlight the $1.3 trillion in “spending cuts” that they want everyone to believe represent “waste, fraud, and abuse”, not the draconian cuts in Medicaid (and potentially Medicare) and myriad other programs the cuts they actually represent.
How can a party that claims to be the party of fiscal responsibility support a bill that will increase the national debt by nearly ten percent over the next ten years as it suctions money upward to the wealthy from the rest of us? The answer lies in a fundamental difference between the Republican leadership’s understanding of how best to encourage economic activity and the understanding of the majority of economists.
Does one best encourage economic activity and growth by shifting money upward to the already wealthy (dubiously dubbed “job creators”) or by encouraging policies that enable the common people to expand their demand for the goods and services that improve their lives? Franklin Delano Roosevelt’s “New Deal” answered that question in favor of the common people—while Republicans, with increasing shrillness and think-tank rhetoric, have argued the contrary.
The Republican Party, especially since about 1980, generally subscribes to “Supply Side Economics”, also know as “Trickle-down Economics”, the proposition that, by providing the already wealthy “job creators” with even more money, they will make investments in industry that will provide jobs and grows the economy by making supply more abundant. By this theory, then, the benefits will accrue, i.e. trickle-down, to the rest of us. The trouble is that much of a supply-side stimulus (for example, the top heavy tax cut of the “Big Beautiful Bill”) is used by the wealthy to further multiply their wealth via financial gamesmanship rather than by investment that increases the supply of goods and services.
All the talk of “job creators”, “‘burdensome’ regulation”, and “‘burdensome taxes’” serves the bogus construct of Supply-side economics. Empower the rich with more money, unleash them by trashing regulations that protect the rest of us, and they will lead the country to an economic renaissance! That said, never doubt that many Republicans truly believe in these essential Trickle-down principles. To paraphrase an old saying, “It is difficult to get a man to understand something when preserving and growing their wealth depends on their not understanding it.”
Republican allegiance to Trickle-down economics lies in stark contrast to “middle out” economics, the economics of the New Deal—the concept that one powers economic growth and general prosperity by increasing the purchasing power of the middle class (especially in times of economic doldrums such as the aftermath of the Covid pandemic). One might also call this concept “Demand Side Economics”—to contrast it to the Republican “Supply Side Economic” orthodoxy of at least the last forty years.
One of the best explanations of this fundamental difference between Republican economic orthodoxy and Demand-side (Middle-out, New Deal) economics is covered in the podcast I’ve referenced and linked below. At this link you can listen. It will be 36 minutes well-spent.
Keep to the high ground,
Jerry
From the introduction to the pertinent episode of the Pitchfork Economics Podcast:
If you've been paying attention to the news, you've probably heard a lot about Donald Trump's “Big, Beautiful Bill”, which I guess is big and beautiful if you happen to be one of the billionaires who will enjoy the tax cuts. For the rest of us, not so much.
So we thought now would be a good time to revisit a 2019 conversation we had with Bruce Bartlett, one of the architects of the Reagan tax cuts, about whether tax cuts for rich people really do create growth. Spoiler alert, they don't. The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
The last five decades of trickle-down economics haven't worked. But what's the alternative? Middle-out economics is the answer.
Because the middle class is the source of growth, not its consequence. That's right.
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Hi there, I'm Jessan Farrell, and I am a former state representative from Northeast Seattle. And in the legislature, I served for five years fighting[…]”
From Pitchfork Economics with Nick Hanauer: From Reagan to Reality: The Case Against Tax Cuts for the Rich (with Bruce Bartlett), Jun 10, 2025