To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: supply-side economics . Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.
The political genius of this idea is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?
From The political genius of supply-side economics | Martin Wolf’s Exchange | FT.com
The belief that you can have a free lunch, that markets will magically make everyone rich, that there are no hard choices and no problems that need to be addressed by means other than tax cuts and deregulation is the modern GOP view of economics. The fact that it doesn’t result in the promises they’ve made seems inconsequential.