Why do Republicans want tax cuts but also increase government spending and reduce deficit?

Question

When I studied political economy in college, in the first lecture of one of my first courses, I was told that the entire duo-field of politics and economics essentially boils down to the distribution of resources given scarcity.

But the Republican Party seems to have contradictory goals. They want tax-cuts. They want to reduce the deficit. They want to increase government spending on border walls and the Defense.

How do these positions make logical sense? Has the Republican Party explained how it actually wishes to obtain these goals despite the fact that doing one thing makes it harder to do the other thing?

I mean, every one of those positions is something we all want. But we know in life there are trade-offs and we need to compromise.

How do they resolve the contradiction?

Answer 1

When you have a two-party system like we have in the United States, you are basically representing a half to a third of the citizenry. Being a collection of human beings, they have contradictory thoughts and hypocritical positions, and tend to be divided up into internal factions.

For example, the Republican party currently houses:

1. Ayn Randian Libertarians. Socially liberal but strong believers in individualism and small government, they tend to be against large-scale stuff like military spending.
2. Tea Partiers. Mostly economics-focused, they want a USA that pays its debts, doesn't buy anything it doesn't need, and want to somehow recapture the era when jobs were for life and higher education unnecessary.
3. Reagan Conservatives. People who believe in a strong military, low taxes, and that handouts to the rich can solve all economic woes. Socially conservative, often religious.
4. Evangelicals. Socially very conservative, they want a leader who will remove Roe v Wade and bring back Christian indoctrination in schools. There was a time when they wanted their leader to be a King Solomon of intelligence and piety, but they've decided their other priorities are more important.
5. Fringe groups. Nazis, I-am-my-own-sovereign-country people, cultists, racists, and religious wackos. Once, these people had very little power in the party, but they increasingly fit well with Tea Party love of a prior age, Libertarian love of small government, and Evangelical desire for the Rapture.

Now, how do you govern a party with that diverse of viewpoints? You compromise. Does it seem illogical? Mostly yes. But you can understand how they've gotten to this point.

Answer 2

The tactic behind tax cuts is called starve the beast. The beast being government and its food being tax revenue. The idea is that spending is hard to cut. As soon as there is government spending on anything a special interest group will appear and fight any decrease in that spending. However, taxes are easy to cut, those paying lower taxes will back the tax decrease. Then, when a group wants to increase spending, they'll have to fund it from somewhere and there won't be an easy source of funding. An example of this attitude on the right comes from Alan Greenspan in 1978.

Let us remember that the basic purpose of any tax cut program in today's environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending.

So the end goal is to reduce the size and scope of government. Tax cuts are tool to get there. Obviously this leads to a problem if the tax cuts lead to deficits which politicians ignore and continue to spend money.

In terms of spending, many conservatives in the Republican party are appalled by the hipocracy of supposed 'fiscal conservatives' blowing up the deficit. For example, this came up when the GOP passed a deficit inducing omnibus spending bill in 2018 and almost immediately put out a vote on a blanced budget ammendment that would not have let them pass the spending bill they just authorized.

“There is no one on Capitol Hill, and certainly no one on Main Street, that will take this vote[on the blanced budget bill] seriously,” said Freedom Caucus Chairman Mark Meadows (R-N.C.), on the heels of a $1.3 trillion spending package that Republicans approved just last month...

One conservative commentator, Barbara Boland, equated the upcoming exercise to “gorging on a sumptuous feast while insisting that you want a svelte physique.” And other members of the House Freedom Caucus, all of whom voted against a $1.3 trillion spending package in late March, are calling it little more than a charade.

Issues of taxation and spending definitely divide the party. Republicans who back big spending say they're making pragmatic compromises, while those who don't say it's hypocritical bowing to special interests.

Answer 3

The average Republican voter is not the same thing as the average of Republican voters (plural). It's entirely (mathematically) possible for the "average Republican voter" to want contradictory things in a policy prescription that does not actually reflect the position of any actual person.

Which is all cool in the abstract, but they still have to elect people. Any given candidate is going to be a mishmash of positions that deviate within an acceptable amount of the average position in the party on any given issue, and any given voter may like that candidate more or less based on his or her ideas of what constitutes an ideal mishmash. Carduus's answer mentions conflicting groups but I think it's more fundamental than that: you need a party to be the proxy for the individual members of it but for n >= 2 it's never going to accurately reflect the needs/wants of any specific individual. Groups are lossy compression. Especially political parties.

So saying that "Republican voters want contradictory things" is not that different than saying "voters want contradictory things".

Also, I'm being kind of generous here because people in general hold contradictory wishes unless they work very very hard at reconciling them. But Republican policy isn't based on some sort of inherent contradiction beyond the dangers of aggregation.

To put it another way, some right-winger could legitimately say "Democrats want to protect Freedom of Speech, but also vigorously suppress hate speech, isn't that a contradiction?". And it is. But it has the exact same explanation: some Democrats really love Free Speech and reluctantly admit this allows for human garbage and some Democrats really dislike hate speech and want to suppress it even at the cost of some false positives.

Answer 4

1. Some voters, members, and elected officials of the party have the stated opinion that tax cuts increase income.

2. Some voters, members, and elected officials of the party want to significantly reduce government spending in other areas than defense.

3. Some voters, members, and elected officials of the party only support 2 of the 3 goals you mentioned, maybe even only 1. Yet they associate with and support the Republican party due to political realities. In the US system any third party is severely disadvantaged, which usually means people have to chose either of the 2 major parties.

Answer 5

It's really simple when you think about it. The Republicans want to cut spending, but (simplistically) only on things like social programs. Since those are a large share of total spending, they could theoretically, if given a free hand to eliminate them, cut taxes, balance the budget, and have some money left for their favored programs..

Answer 6

Disclaimer: I identify as Republican (well, Conservative since I'm not American, but same difference). Here's a single person's take (although I believe my opinion to reflect at least mostly the majority Conservative opinion):

Most of what you have said is correct. Reducing the deficit requires additional income. Tax cuts reduce income. Border security and defense take income. These things are contradictory. However, you are missing what is perhaps the most important part of the puzzle, which is the size and scope of government.

In particular, a core tenet of the Conservative ("Republican") worldview is that a) government should be as small as possible, and b) government is very wasteful and inefficient. To create a concrete example (pulling numbers out of my butt here, please don't ask for citations): Let's say you own a company and you have 100 people on staff, each making, let's say $50k/yr. That's $5M/yr in payroll costs for your company. Let's say, for example, that this company has a 75% output ratio, which is to say, on average, each employee is idle for 25% of their time. That means you can, in theory, fire 25% of your employees, offload those employees' work onto the other 75%, and now you will have 100% output (obviously the real world doesn't work exactly like this, but it's close). So you go ahead and fire 25 people. That's a cost savings of $1.25M/yr in payroll, without decreasing company net output (again, simplification warning). Now you can take that $1.25M/yr and put it into, say, R&D, or buying new machinery, or getting a new, swankier office, or whatever else you like.

The government, say Conservatives, is in a similar situation. There are so many government employees whose jobs are redundant, or who simply don't do them properly (e.g. show up late/leave early/slack off, etc), and if we, to use a colloquialism, "whipped them into shape", then we could fire a whole swath of government employees and save money. Then we take that money and use it to pay down the debt, or implement tax cuts, or spend it on border security and defense.

But that's not the only place where the government can save money. Government contracts are well known to be bloated with a ton of money that doesn't need to be spent. For example (unfortunately a dated one but useful for illustrative purposes), here is a post over on Skeptics SE which, in the accepted answer, states that in the 1960s, the US government bought a bunch of mechanical pencils for astronauts at a cost of over $100 each! Now, while it is difficult to know how much money the government is spending on ongoing government contracts (I presume the budget, such as it is, is public information, but where each of those dollars is going and to whom I'm going to guess is probably classified), it is not unlikely that similar such wasteful spending is ongoing in the modern day as well (and even if we did know the breakdown of money spent on contracts, it would be difficult to know how much of that spending is wasteful, and how much is required to do the job). Once again, if the government can spend in a responsible way on their government contracts, then money can be saved which, again, can be put into tax cuts, or defense, or paying down the debt.

Aside: One of the selling points for Donald Trump amongst Conservatives was the fact that, as a businessman, who literally wrote the book on the art of the deal, it was presumed that he would be a good negotiator to try to knock down the costs of some of these government contracts. Unfortunately I don't have numbers to back up whether or not that has turned out to be the case after the fact (a useful edit to this post might include such data if someone else happens to know where to find it).

An additional way in which the government is wasteful is in wasteful social assistance spending. Not to say all social assistance spending is wasteful, that's certainly not true (a true economic conservative may argue that, but most reasonable people agree that some sort of social safety net is important); the part that is true is that currently, there are social assistance programs which are being exploited by people who do not deserve them. As a simple example, I found this article on Google which states that in the year 2013-2014, the state of Pennsylvania (not the whole US, just Pennsylvania) paid welfare benefits to over 2300 dead people. I don't think anyone can rationally argue that dead people should be receiving social assistance. Once again, if we take that money and stop spending it wastefully, then we can spend it on, again, paying down the debt, tax cuts, border security, and defense.

And yes, before anyone says it: The amount of welfare benefits paid to 2300 dead people in one year is peanuts compared to the whole government budget. This is true. However, every dollar helps, and this is but one very simple, very egregious example that I could easily find with a cursory Google search; more examples most assuredly exist, and the government certainly has the tools to find them.

An additional (but somewhat more controversial) way in which the government wastes money is with regards to regulatory structures. There are lots of business regulations in terms of how businesses can operate (one very easy example for illustrative purposes being greenhouse gas emission limits). It costs money for companies to implement these regulations, but it also costs the government money to oversee these regulations being implemented. Someone has to pay for an inspector to go on-site at some manufacturing plant to make sure the employees are being provided, for example, hard hats for construction work (a simple example for illustrative purposes; no reasonable person would argue that providing safety equipment is a negative). Some of these regulations are good and worthwhile, others not as much (and which ones fall into which camp is more or less a matter of opinion, so I'm not going to get into the finer points). Conservatives would argue that the fewer regulations, the better. There are economic reasons to do this from the perspective of the business, but leaving those aside, from the government's perspective, the less regulation there is, the less money you have to pay public servants to verify those regulations are being followed. This decreases the government's cost, and that money can be put into, you guessed it: paying down the debt, tax cuts, border security, and defense.

This is an insight into a Conservative point of view on the issue, I hope it was useful.

Answer 7

First, I'm going to quibble with the definition you were given. Political scientists generally hold (after Easton) that politics involves the "authoritative allocation of values in society." Scarce resources are a particular kind of value that a political economy allocates, but they are not the only such values, or even the most prominent. I'll come back to this point...

The Republican party has historically — back to its inception before the US Civil War — worked on a platform of economic adventurism. The basic idea (over that century and a half) is that the economy increases as private enterprise expands into new regions, and that this economic expansion spreads through the population: both as new individuals enter the 'enterprise' class as entrepreneurs, and as established companies hire workers, managers, and specialists to accomplish the expansion. Originally this adventurism manifested as expansion into new territories: the drive West across the continent; the establishment of economic protectorates in Alaska, the Caribbean, and the Pacific islands; the Monroe Doctrine in full expression. After the 1928 stock market crash and the beginnings of the New Deal, the ideal shifted away from territorial expansion (largely associated with agriculture, mining, and heavy industry) to commercial expansion (innovation of new products, exportation of manufacturing to low-wage regions to increase profitability, the development of new markets). The Reagan administration may have coined the term 'trickle-down economics', but the idea of an economy driven by private adventurers seeking wealth and prominence has been a mainstay of the GOP since before Lincoln. The system is prone to booms, busts, and bubbles as opportunities for expansion appear and dry up — it's never a stable system — but it is time-honored.

Now, economic adventurism holds the belief that the government's proper role is to protect and support the efforts of private industry. For instance, during the 19th century the US military was primarily used to suppress unrest among native populations. The US Cavalry protected settlers in the West from the resident Indian populations, and watched over railway lines that were mainly meant to carry ores, raw materials, and agricultural goods back to urbanized areas; the US Marines quelled uprisings in places like the Philippines and protected the operations of US industries seeking out new natural resources and cheap labor environments. Likewise, in the early 20th century police were primarily tasked with protecting private property, which included things like union-busting and other suppressions of collective activity among the unpropertied masses. Where the adventurist ideology considers taxation at all, it taxes consumption — taxing the consumer of the end product, not the producer — or sometimes tariffs, duties, or levies on goods that the producer can pass on to the consumer through increased pricing.

Beginning with the New Deal, though, the role of government shifted: it no longer used its power in favor of private adventure interests, but started trying to create a stable economic platform that limited growth in favor of the general public good. It's in this era that (for instance) the Army Corps of Engineers was pressed into service to build reservoirs, interstate highways, and other infrastructure, while the government started imposing regulations on businesses, created minimum wages for workers, legitimized unions and their activities, and did other activities that worked against the interests of economic adventurism. As such, the GOP took on the political role of opposing these 'socialist' changes, wanting to draw the government's power back towards where they believed it belonged: squarely focused on the interests of private enterprise.

The paradoxical stances of the modern Republican party builds off of that history. Whenever you hear Republicans use the phrase 'small government', they mean that government should not be in the business of interfering with private individuals. Economic adventurers should not be taxed, regulated, or otherwise constrained; workers, immigrants, the poor, and etc should not be protected from deprivation or hardship (which is the natural course of things in economic adventurism). This does not mean that government should be factually small. The government needs to invest in a military capable of protecting foreign economic interests; to create a police system capable of suppressing domestic unrest that might threaten commercial or industrial holdings; to provide funding for practical scientific and technological research that can spur private innovation; to create infrastructure industry demands. But government should find the funding for such necessary tasks entirely from consumers

So, the modern GOP wants to cut back on any form of taxation that impacts economic adventurism: hence huge tax cuts and loopholes for the wealthiest in society. But it wants protections from ever-increasing world-wide threats to commerce — terrorism, socialism, civil-rights protests, climate-change activism, etc — so it calls for huge investments in military and police. In their worldview this is non-contradictory; it merely reinvokes the boom-bust cycles that they view as a natural consequence of economic activity. Government should invest in the expansion of the economy, suppress 'malcontents' who object to the poisonous consequences of rampant economic adventurism, and in the end protect the economic adventurers and their property from everyday citizens who might riot when the next 'bust' moment inevitably comes in the cycle. It's not self-contradictory as much as it's callous and self-centered.

A note in passing: this analysis is fine up to the beginning of the Trump era, but Trumpism has ultimately sheared the GOP away from an economic adventurist worldview to a simpler and more dangerous political nationalist worldview. There is no economic policy under Trumpism, merely (logically inconsistent) nativist pseudo-economic assertions: e.g. that Mexicans or Chinese (or who knows... maybe Belgians) are stealing US jobs or interfering with the US economy. This is why I quibbled in the first paragraph about the allocation of values. Trumpism isn't concerned with allocating anything that actually resembles a resource, scarce or otherwise; it merely tries to dictate that political, social, and economic power rightfully belongs to Trumpists, asserting that a purely political value is theirs alone. This is a common effect as ideological economic adventurism dies — one we saw all across Europe through the early 20th century — where the loss of economic opportunities creates a sense of enraged entitlement that transforms into blatant authoritarianism. What the GOP will become after this Trumpist schism — assuming it survives as a cohesive and coherent party — I don't know. Some Republicans will return to that conservative root, and some will give up the idea of being conservative at all. In any case, we will likely see a new polarization of political parties over the next decade or two under the fallout from the Trumpist debacle.

Answer 8

Let's understand the context in which we live to better understand the nature of politics in the USA. We live in a corporatocracy, not a democracy, where, in the USA, two political parties are essentially the arms of the corporate class, fighting over the spoils of an economy.

The Republicans are in practice a party of the 1% wanting to create a modern feudal state. Democracy and government pose a threat to their power, privilege and ROI. This explains why they want small government, with the exception of the police, military and the criminal justice system to enforce their laws of private property. Expenditures on the military and stock market, which are corporate bailouts in the trillions and a form of socialism, only support their goals of maintaining the relations of capitalist production.