by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Democrats have long championed running budget deficits and ramping government spending to kickstart the economy. Now that Republicans are doing just that, Democrats aren’t so sure.
For years, the prevailing Democratic talking point was that expansionary fiscal policy — the idea that cutting taxes, increasing government expenditures, or both — is the best way to stimulate economic growth and put downward pressure on inflation. Now Republicans, during a period of near full employment and economic expansion, are hopping on board, cutting taxes and revving up government spending.
President Donald Trump signed a $1.5 trillion tax bill into law in December that slashed corporate, business and income tax rates. Congressional Republicans last week rolled back the 2011 budget austerity measures the party fought aggressively with former President Barack Obama’s administration to enact with a two-year budget deal that increases federal spending some $300 billion. Trump signed the bill into law Friday.
Despite enacting what Democrats have asked for and tried to push under Obama, Democrats aren’t thrilled with the Republican rollout, arguing that the policies either miss the targets or the timing is completely off.