There was a time when the Republican Party was legitimately “conservative”; it was suspicious of new government programs and foreign entanglements and in favor of balanced budgets. Those days are long gone. Today, the GOP is unabashedly reactionary on social issues, swaggers abroad, and believes that tax cuts are the solution to every possible economic problem, deficits be damned.
I’ve addressed parts of this evolution previously. The question for today is, how did the party of limited spending and balanced budgets turn tax cutting into a religion?
It all goes back to Reagan, of course. The deep recession of the early 1980’s was caused by dramatic increases in interest rates imposed by the Fed in order to crush inflation. The expansion that followed was primarily due to a corresponding fall in interest rates after the battle with inflation had been won. Due to Reagan’s commanding presence, however, the credit for the expansion was given by the business community, not to Paul Volcker, but to the 1981 tax cuts. It has been an article of faith in the GOP, and the business community in particular, ever since that tax cuts are always good, that government doesn’t have to be paid for, and that, in Dick Cheney’s words, Reagan proved that deficits don’t matter.
The irony, of course, is that recent experiences have shown that tax cuts frequently don’t fuel economic expansions, and that Reagan himself was willing to raise taxes after 1981. The myth of “Morning in America” remains so strong, however, that inconvenient facts have simply been expunged from the narrative.