Trickle Down Economics Doesn't Spur Growth
"Sure. But first of all, it’s not clear that that would add trillions to the deficit, because I really believe that if we expand the base of the economy, which we could do by selectively lowering some taxes, you have a broader base on which to apply the tax."
Pat Toomey, Republican Senate candidate.
Senate Minority Leader Mitch McConnell also stated, "There's no evidence whatsoever that the Bush tax cuts actually diminished revenue." Toomey and McConnell are pushing the debunked trickle down economic theory. The reality is the Bush tax cuts created less revenue growth than the Reagan or Clinton administrations.
David Stockman was Ronald Reagan's former director of the Office of Management and Budget. In an interview, Stockman told journalist William Greider that trickle down economics was rebranded supply-side economics. It is hard to sell to the middle class and poor people that tax cuts for the rich will "trickle" down to them.
"It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."
In another interview, Stockman said Reagan intentionally used trickle down economics and increased spending as part of his plan to cut New Deal and Great Society programs he loathed.
Back in 1981 David Stockman was the wonderkid of the Reagan administration–the director of the Office of Management and Budget who’d craft in actual budgets the trickle-down miracle Reagan had promised on the campaign trail: lower budgets, lower spending, higher tax revenue. But trickle-down economics was a wish, not a reality. It’s never worked. Lower taxes don’t generate more revenue. They generate deficits.
Reagan knew it. So did Stockman. So did their guru, Friederich von Hayek. The deficits were intentional all along. They were edsigned to “starve the beast,” meaning intentionally cut revenue as a way of pressuring Congress to cut the New Deal programs Reagan wanted to demolish. “The plan,” Stockman told Sen. Daniel Patrick Moynihan at the time, ” was to have a strategic deficit that would give you an argument for cutting back the programs that weren’t desired. It got out of hand.”
Reagan mission was the same as Grover Norquist's drown government in a bathtub quote. Reagan and Norquist didn't really believe tax cuts would magically create surpluses. The new generation of Tea Party Republicans coming up learned economics from talk radio, Republican stump speeches and the National Review. The new breed of Republican candidates are so economically stupid that they actually believe the big lie that is trickle down economics. Toomey has a background in banking. Toomey isn't stupid about economic policy. He is just as cynical as Reagan and Norquist.