As House Republicans turned a sharp focus on inflation, Rep. Byron Donalds (R-Fla) asserted that trickle-down economic theory, which asserts that policies that benefit the wealthy will trickle down to everyone else, does work despite sharp criticism of the policy.
“The late, great Margaret Thatcher said it better than any of us ever could: Joe Biden to the Democrats will prefer the poor be poor so the rich are less rich,” Donalds said in a press conference Tuesday.
“Joe Biden will 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,” Donalds said.
Trickle-down economics became widely popular during Ronald Reagan’s presidency as a way to criticize his favored policies, such as tax cuts for the wealthy.
A 2020 study from the London School of Economics that analyzed 50 years of tax cuts in 18 countries found that reducing taxes on the rich leads to higher income inequality and “do not have any significant effect on economic growth and unemployment.”
The comment from Donalds came shortly after President Biden denounced the economic theory in a speech at an AFL-CIO conference.
“We are not going back to the false promises of trickle-down economics. We are going forward,” Biden said.
Biden made similar comments opposing trickle-down economics in other recent speeches, arguing that the philosophy leads to greater inequality and slower growth.
Inflation hit a four-decade high of 8.6 percent in May, according to consumer price index (CPI) data from the Department of Labor released last week.
The economy and cost of living are priorities for voters heading into the 2022 midterm elections, according to numerous polls. Republicans largely blame inflation on Democrats passing large spending packages, while Democrats point to supply chain problems related to the COVID-19 pandemic.
“President Biden and his team follow the siren song of the false gods of modern monetary theory that you can borrow and spin your way to prosperity,” Rep. French Hill (R-Ark.) said in the press conference.