Not a person alive relishes the idea of paying taxes. For decades or more, this reality has been a hole card for the Republican candidates running for Congress or the presidency; a promise of tax cuts is their favorite cheap trick, an easy way to bait voters.
Lower taxes might implicitly seem to mean lower revenue for the federal government. Not so, insist conservatives, who repeatedly march out the old Reaganomic theory of tax-cutting supply-side economic stimulation. Here’s how it is supposed to work: tax cuts give people more money to spend and invest, and a growing economy means a growing tax-revenue base. Unfortunately, that theory has long been debunked as a gimmick, even by people like David Stockman, the Reagan advisor who propounded the theory to justify 1980s tax cuts. The numbers have never backed it up. But that doesn’t stop Republicans from trumpeting the theory’s chimeric glories.
Of course, there’s another way to make tax cuts fiscally sensible: match reduced revenues with reduced expenditures. Anyone with a household budget knows how this works. If income is tight, you cut corners to make ends meet. Along similar lines, lower taxes and small government have long been cornerstones for conservative economic doctrine. This is the counterpoint to the big-government, tax-and-spend approach conservatives accuse liberals of championing.
The problem is that Republicans have never figured out the small-government part of the equation – how to shrink the government, and the services it provides, to dovetail with lower tax rates. The most recent effort at cutting the size of government, the follies of Elon Musk and the Department of Government Efficiency that he headed, is the latest failed stab at trimming government expense. Musk found it is easy to label the government, with a federal workforce of almost five million, as a vast bureaucracy bloated by redundancy, inefficiency, overreach, and fraud. Then again, maybe not . . .
Musk bragged that he could slash trillions of dollars in government spending with a quick swipe of his symbolic chainsaw. But the DOGE cuts came nowhere near the promised amounts. And many, if not most, of the cuts proved problematic.
Thousands of workers who were fired turned out to be more essential than the DOGE boys thought and had to be re-hired or paid considerable restitution. The elimination of USAID, the agency that provides economic and medical help to needy countries, resulted in tons of undelivered food rotting in warehouses and, according to some sources, has led to more than a half million preventable deaths internationally. By some estimates, the DOGE cuts ultimately cost the government more than they saved. Assessments by both liberal and conservative analysts concluded that DOGE ended up as an embarrassing fiasco.
Tax cuts are political candy, but cutting government and the services it provides is a more bitter pill to force voters to swallow. The result is that, rather than being dastardly tax-and-spenders, Republicans cut taxes... and still spend. While they might tout fiscal prudence by snipping off a small project or program here or there, that’s just political gamesmanship. They know it is politically suicidal to go after meaningful cuts. Big-ticket items like Social Security or Medicare (37% of the federal budget) are off the table. Growing debt obligations (14% and going up) are locked in and untouchable. Cuts to an already over-priced military (14%) – are unthinkable to conservatives. Sixty percent of government outlays are, by law, mandatory (as opposed to discretionary) and can’t be cut even if there was a will to do so.
Without corresponding budgetary cuts, tax cuts under Republican administrations over the last several decades have predictably caused federal deficits to balloon; the growth of the current national debt, now approaching $40 trillion, is accelerating at an unprecedented rate under the tax-cut-happy Trump administration. Meanwhile, Republicans aren’t exactly operating in the spirit of fiscal, small-government constraint. According to the Congressional Budget Office, the Trump Administration is proposing a 42 percent increase for the 2027 military budget (to more than $1.5 trillion), and the budget line item for Immigration and Customs Enforcement jumped more than eightfold in 2026, to $85 billion, making it by far the most expensive law-enforcement entity in the country.
Republicans get away with it because, for most Americans, the national debt is an abstraction. Life goes on, seemingly unaffected. In the long run, however, a deeply indebted government leads to higher interest rates for everybody, increased inflation, wage stagnation, and disruption of international trade. Traditionally, U.S. Treasury issues have been one of the world’s safest havens for investors. But a fiscal irresponsibility causes Treasuries to become riskier, discouraging investors and/or increasing the interest rates the government must pay, ultimately hampering the government’s ability to raise enough many to pay its bills. Investors will look elsewhere.
Donald Trump once famously declared, “I love debt. I love playing with it.” That might be OK if you’re playing with your own money, or money lent to you privately by banks. It is a far different story when money to run the federal government, public money, is in play. Failure to meet debt obligations can lead to bankruptcy, as it has several times in Trump’s business dealings. Bankruptcies happen in private enterprise all the time. A U.S. government teetering toward insolvency is a whole different ball of wax.
Of course, that doesn’t mean that Democrats will start running on campaign promises to raise taxes, a surefire political loser. But they are at least willing to acknowledge that running an effective, fiscally responsible government – providing and paying for the kinds of services that Americans expect from their government – is a costly business. Bottom line: tax cuts, politically alluring as they might be, are fiscal tomfoolery without corresponding budget cuts.
Oliver lives in Warren.
