President Trump’s economic success rests on the passage of his one “big, beautiful bill.”
We’ve been talking about this for months, and the timeline on the “big beautiful bill” is still somewhat in doubt, because it has to pass through the House, a version has to pass through the Senate, and then there’s going to be reconciliation between the House bill and the Senate bill.
Whatever you see in the House bill might not end up in the final bill. Massive controversy is already breaking out in the House over where the cuts in spending are going to come from. Many House Republicans are calling for cuts to make up for the loss in revenue to the federal government that occurs when taxes are not increased.
As you know, conservatives have been discussing the Laffer Curve for 50 years. Economist Art Laffer pointed out that if you’re looking for the proper rate of taxation, it can’t be zero because then the government has no money to spend. But it also can’t be 100 because then the government has no money to spare; no one will actually go out and do business if they are going to have all of their money removed by the federal government.
The Laffer Curve suggests there is a point at which, if you tax people more, then you will actually end up with declining government revenues as a result, because people will simply work less to avoid the top tax bracket, or something similar.
There’s certainly truth to that, although it’s unclear where exactly the inflection point is with regard to the Laffer Curve. But it has been long-standing conservative economic dogma that if you increase taxes, you will end up quashing economic growth because you’re taking money away from the more efficient private sector and sticking it in the public sector, where it gets doled out by a bunch of politicians to their favorite pet projects.
In addition, how you look at government revenue differs between conservatives and people on the Left. People on the Left believe that the government basically owns your money and then allows you to keep some of it. Conservatives believe you own your money, but you have to give some of it to the government to provide public services.
When it comes to discussing what government revenue looks like, the real discussion that should be had — and the one no one will ever have — is what the proper role of government in our lives actually is. Why is it that our government is spending $6-7 trillion a year at the federal level? This was not the case when the United States was founded. The original expenditures by the federal government at the beginning were absolutely minimal. It stayed that way except for times of war, such as the Civil War, all the way up through the end of World War I.
Then, government spending began to grow slowly. Later, with FDR, it exploded all out of proportion. Now we have roughly $7 trillion being spent every single year.
That’s what’s racking up the national debt. Thus, there are a couple of different takes on what should be done. A traditional classical conservative might say, we need to cut massive reams of government spending by pushing it all back down to the states. If the states wish to do things like Medicare and Medicaid, then the states can do that, but it shouldn’t be up to a taxpayer from Montana to pay for the health care of a guy from California because he’s 70 years old.
There’s the Republican Party position, which is “let’s cut around the edges,” and the Democratic Party position, which is “let’s never cut anything ever for the rest of time.”
The latter two positions are the ones the American people have opted for.
That’s what a lot of the debate is concerning this current GOP tax bill.
Inside the Republican caucus, there are a bunch of Republicans who believe that cutting spending in any way, shape, or form is detrimental to Republican electoral chances. The American people don’t want it. Polling basically says there’s truth to that, as the American people will say they don’t want the government to be so big and provide so many services, but when you ask them which services they would like to cut, they start to scratch their head and really have no idea what the answer could be to that question.
Then there are traditional Republicans who say, “Listen, if we’re ever going to get to anything more like a big restructuring of government, you have to start somewhere or we are going to plunge off the debt cliff.”
So all of this is manifesting in the debate over the current “big, beautiful bill” in the Republican House. There’s no question that spending is going to continue to increase. The only question is whether the rate of the increase is going to be slightly slower or slightly faster.
There is a debate inside the Republican Party between people who sort of side with Democrats, saying, “We’ll never cut any welfare spending ever, ever, forever because the American people don’t like it,” and people who say, “We need to restructure some of this, we’re going to hit the fiscal cliff sooner than humanly possible.” Then there’s the third group that says the federal government has no role in virtually any of this.
In the end, President Trump is going to put his boot down and force a bunch of reluctant Republicans to support whatever the “big, beautiful bill” is.
But then you go to the Senate, where the Republican majority is not particularly large. You could easily see some of the “moderate” Republican senators, like Lisa Murkowski in Alaska or Susan Collins in Maine, drop off. If the bill is not conservative enough, you could see people from the opposite side drop off.
The markets right now have a tax cut already priced in. They believe it’s going to happen. If this tax cut does not happen, if somehow this whole thing falls apart, it’s a disaster for the Trump administration.
If Trump pulls this off, it’s a major act of political magic by his administration, Senate Majority Leader John Thune, and House Speaker Mike Johnson.
By the way, it is pretty amazing that the United States is so addicted to spending that even talking about work requirements for welfare is incredibly controversial. That is the mark of a country that has been high on its own supply for far too long. We are an unserious country if we refuse to come to a reckoning with the reality that is our $37 trillion national debt.
In the meantime, there is magic to be done.
[#item_full_content]
[[{“value”:”
President Trump’s economic success rests on the passage of his one “big, beautiful bill.”
We’ve been talking about this for months, and the timeline on the “big beautiful bill” is still somewhat in doubt, because it has to pass through the House, a version has to pass through the Senate, and then there’s going to be reconciliation between the House bill and the Senate bill.
Whatever you see in the House bill might not end up in the final bill. Massive controversy is already breaking out in the House over where the cuts in spending are going to come from. Many House Republicans are calling for cuts to make up for the loss in revenue to the federal government that occurs when taxes are not increased.
As you know, conservatives have been discussing the Laffer Curve for 50 years. Economist Art Laffer pointed out that if you’re looking for the proper rate of taxation, it can’t be zero because then the government has no money to spend. But it also can’t be 100 because then the government has no money to spare; no one will actually go out and do business if they are going to have all of their money removed by the federal government.
The Laffer Curve suggests there is a point at which, if you tax people more, then you will actually end up with declining government revenues as a result, because people will simply work less to avoid the top tax bracket, or something similar.
There’s certainly truth to that, although it’s unclear where exactly the inflection point is with regard to the Laffer Curve. But it has been long-standing conservative economic dogma that if you increase taxes, you will end up quashing economic growth because you’re taking money away from the more efficient private sector and sticking it in the public sector, where it gets doled out by a bunch of politicians to their favorite pet projects.
In addition, how you look at government revenue differs between conservatives and people on the Left. People on the Left believe that the government basically owns your money and then allows you to keep some of it. Conservatives believe you own your money, but you have to give some of it to the government to provide public services.
When it comes to discussing what government revenue looks like, the real discussion that should be had — and the one no one will ever have — is what the proper role of government in our lives actually is. Why is it that our government is spending $6-7 trillion a year at the federal level? This was not the case when the United States was founded. The original expenditures by the federal government at the beginning were absolutely minimal. It stayed that way except for times of war, such as the Civil War, all the way up through the end of World War I.
Then, government spending began to grow slowly. Later, with FDR, it exploded all out of proportion. Now we have roughly $7 trillion being spent every single year.
That’s what’s racking up the national debt. Thus, there are a couple of different takes on what should be done. A traditional classical conservative might say, we need to cut massive reams of government spending by pushing it all back down to the states. If the states wish to do things like Medicare and Medicaid, then the states can do that, but it shouldn’t be up to a taxpayer from Montana to pay for the health care of a guy from California because he’s 70 years old.
There’s the Republican Party position, which is “let’s cut around the edges,” and the Democratic Party position, which is “let’s never cut anything ever for the rest of time.”
The latter two positions are the ones the American people have opted for.
That’s what a lot of the debate is concerning this current GOP tax bill.
Inside the Republican caucus, there are a bunch of Republicans who believe that cutting spending in any way, shape, or form is detrimental to Republican electoral chances. The American people don’t want it. Polling basically says there’s truth to that, as the American people will say they don’t want the government to be so big and provide so many services, but when you ask them which services they would like to cut, they start to scratch their head and really have no idea what the answer could be to that question.
Then there are traditional Republicans who say, “Listen, if we’re ever going to get to anything more like a big restructuring of government, you have to start somewhere or we are going to plunge off the debt cliff.”
So all of this is manifesting in the debate over the current “big, beautiful bill” in the Republican House. There’s no question that spending is going to continue to increase. The only question is whether the rate of the increase is going to be slightly slower or slightly faster.
There is a debate inside the Republican Party between people who sort of side with Democrats, saying, “We’ll never cut any welfare spending ever, ever, forever because the American people don’t like it,” and people who say, “We need to restructure some of this, we’re going to hit the fiscal cliff sooner than humanly possible.” Then there’s the third group that says the federal government has no role in virtually any of this.
In the end, President Trump is going to put his boot down and force a bunch of reluctant Republicans to support whatever the “big, beautiful bill” is.
But then you go to the Senate, where the Republican majority is not particularly large. You could easily see some of the “moderate” Republican senators, like Lisa Murkowski in Alaska or Susan Collins in Maine, drop off. If the bill is not conservative enough, you could see people from the opposite side drop off.
The markets right now have a tax cut already priced in. They believe it’s going to happen. If this tax cut does not happen, if somehow this whole thing falls apart, it’s a disaster for the Trump administration.
If Trump pulls this off, it’s a major act of political magic by his administration, Senate Majority Leader John Thune, and House Speaker Mike Johnson.
By the way, it is pretty amazing that the United States is so addicted to spending that even talking about work requirements for welfare is incredibly controversial. That is the mark of a country that has been high on its own supply for far too long. We are an unserious country if we refuse to come to a reckoning with the reality that is our $37 trillion national debt.
In the meantime, there is magic to be done.
“}]]
