Republican Rep. Byron Donalds of Florida contended that “trickle-down” economics works, countering President Joe Biden’s oft-repeated claim that it does not.
“The late, great Margaret Thatcher said it better than any of us ever could: Joe Biden and the Democrats would prefer the poor be poorer, so the rich are less rich,” Donalds said at a Tuesday news conference on Capitol Hill.
“Joe Biden would prefer to build an economy that doesn’t work for anybody, as opposed to letting the free market — and yes, trickle-down economics, which does work — actually flourish in the United States,” the congressman added.
Donalds: Trickle down economics, which does work… pic.twitter.com/T13D5OzjI0
— Acyn (@Acyn) June 14, 2022
Biden has taken aim at trickle-down economics multiple times in recent weeks.
It is a pejorative that Democrats have used since the Reagan administration in the 1980s to try to discredit what supporters call supply-side economics.
President Biden: “Part of the reason I ran for president is because I was tired of trickle-down economics. It doesn’t work. My plans have produced the strongest, fastest, most wide-spread economic recovery America has ever experienced with record jobs.” pic.twitter.com/Nea3wuKpOd
— The Hill (@thehill) June 6, 2022
Last week Biden said, “Part of the reason I ran for president is because I was tired of trickle-down economics. It doesn’t work.”
On Tuesday he tweeted, “We’re not going back to the false promises of trickle-down economics. We’re going forward to an economy that works for everyone.”
One gets the sense that his communications team has done some poll-testing and found that a majority of Americans don’t like the sound of trickle-down economics.
We’re not going back to the false promises of trickle-down economics.
We’re going forward to an economy that works for everyone.
— President Biden (@POTUS) June 14, 2022
At first blush, it sounds like lower income Americans are getting the leftovers, but the idea is that building a rising opportunity economy lifts all boats.
The central premise of supply-side economics is if punitive tax burdens are lowered on businesses and individuals, the economy will grow and add more jobs.
Kennedy pitched his plan in 1962 saying, the right kind of tax cut “resulting from a permanent basic reform and reduction in our rate structure” will create more jobs and income and eventually more revenue.
“It will include an across the board, top to bottom cut in both corporate and personal income taxes. It will include long-needed tax reform that logic and equity demand,” he said.
Both Reagan and Trump followed a similar model.
The results were the same each time: incredible economic growth and increased revenues and impressive job creation.
In 1961, the year JFK took office, the nation’s gross domestic product was approximately $3.3 trillion, and by the end of the decade in 1969, it was $4.9 trillion.
In the 1980s under Reagan, the economy grew from $6.9 trillion to $9.2 trillion. Revenues were up 40 percent, and unemployment dropped from a high of 10.8 percent to 5.4 percent.
Finally, following passage of the Tax Cuts and Jobs Act in 2017 under Trump (which is still in place), the GDP went from $18.1 trillion to $19.4 trillion last year.
Further revenues crossed the $4 trillion threshold in fiscal year 2021 and are on track to hit $4.8 trillion this year, up from $3.3 trillion in 2017. And the unemployment rate is currently 3.6 percent.
Donalds is right: Supply-side economics, a.k.a. trickle-down economics, works.
The record could not be more clear.