Part 5/12:
Supporters of the Big Beautiful Bill, including Trump's economic advisors, argue that this legislation is a catalyst for economic growth. By extending tax cuts and reducing regulatory burdens—similar to the Trump tax cuts—they posit that GDP growth will accelerate. According to this logic, higher GDP means increased tax revenues, which can help reduce the debt-to-GDP ratio over time.
This perspective hinges on classic economic theory: lowering taxes spur economic activity, which in turn increases total tax income—a phenomenon illustrated by the Laffer Curve. The key assumption is that growth can serve as a natural remedy for fiscal imbalance, provided the economy expands rapidly enough.