US conservatives are moving away from the old orthodoxy on how to balance deficits and revenues.


If there is an indelible image of the ossified orthodoxy that came to control the Republican party in recent decades, it is probably the scene on an Iowa debate stage in August 2011. All eight candidates for president raised their hands to indicate that they would walk away from a deal that cut 10 dollars of spending for every one dollar of tax increases. Where had so absurd a position originated? Not with Ronald Reagan, who raised taxes repeatedly when his initial tax cut widened the deficit by more than anticipated. 

Rather, a confluence of easily disproved theories had come together, forming a rushing river of zealotry that culminated in UN ambassador Nikki Haley’s infamous declaration, in response to the Covid-19 pandemic sweeping across the US, that “tax cuts are always a good idea”. Those theories are finally fading as conservatives reassess their blind faith in free markets and hostility to government. Tax and budget debates are shifting as a result. 

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Oren Cass
Oren Cass is chief economist at American Compass.
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