They cited the prosperity that followed the Kennedy tax cuts (early 1960's) and the Reagan tax cuts (1980's) However back in those days the Feds mostly paid their bills with tax receipts, rather than by selling T-bills. Now a days taxes are not paying for the Feds, they are selling nearly $1 trillion worth of T-bills to keep those US treasury checks from bouncing. That's a scary amount of money. GNP is about $17 trillion, so the $1 trillion yearly deficit is about 6% of GNP. That's a bunch more than the deficit back in the Kennedy or Reagan years. It's one of the reasons GNP growth was 1% under Obama.
If we just cut taxes, we will have to run a bigger deficit. Sooner or later, people will stop buying T-bills and then things get dicey. Do we stop paying social security and medicare? Do we stop paying the troops? Do we just let the checks bounce? I don't want to go there.
Plus, selling T-bills is very close to just printing fresh dollar bills to meet our expenses. Look at it from the T-bill buyer's point of view. He gives Uncle cash, Uncle gives him a nicely printed bond, green ink and everything, just like a dollar bill. There is a market for T-bills, runs 5 days a week, 8 hours a day, and should our bondholder need cash, he picks up his phone, orders his broker to sell, and he will have cash in his account in a day or so. Does our bondholder feel any poorer after buying that T-bill? No, he figures the money is still his, he just put it into a T-bill which does pay a small amount of interest. As opposed to bank accounts which pay no interest at all these days.
And we all know that just printing more money causes inflation, the price of goods goes up, and we all agree that is not good.
So before tax cuts can bring prosperity, we will have to cut some spending. There are a lot of things that could be cut right down to zero.
Start with farm subsidies. There aren't that many farmers any more. I worked in industry for fifty years and we never got a penny of federal subsidies. Why should farmers get free money?
Then we could eliminate block grants to the states. If the states want to spend money they ought to have to raise it themselves. When you have to raise the money you will be more frugal in spending it. When you get free money from Uncle, it will be spent, every penny of it, whether the project is worthwhile or not.
Then we could shut down the federal dept of education. Education is controlled and funded at the city, town, and state level. We ought to leave it that way. The federal funds the ed dept hands out are really bribes to get the staties to do things Washington's way. We would be better off dropping the bribes and letting the locals do things their way.
And there are other things which will come to me as I think things other.