Economist Peter Schiff has a message for Republicans who brag about no tax on tips, overtime, or Social Security: you also have to own what came next. In a post on X on Monday, Schiff said those lawmakers "must also accept responsibility for higher inflation, as that was the trade-off."

His logic is straightforward, even if it is not the version you hear on the campaign trail. "Because government spending actually rose as those tax cuts were enacted, the lost revenue means the tax cuts are paid for through higher inflation," Schiff wrote. "So workers get to keep more of the money they earn, but its purchasing power is reduced by the higher prices that are a direct consequence of the tax cuts."

In other words, the extra cash in your paycheck is real. So is the higher price tag at the grocery store. Schiff's point is that the two are connected, not coincidental.

Tips, Gold, and the Demand-Side Argument

One user pushed back, replying that "no tax on tips basically did very little to cause inflation." Schiff was not buying it. "Wrong, it means people who earn tips have more money to spend, which bids up prices," he responded. "You have more demand without a commensurate increase in supply."

Another user asked whether the inflation pressure would send gold higher, noting that gold "has become a risk asset." Schiff said it would over the long run, but added a caveat: "In the short run it led to higher interest rates."

Schiff and Massie on Spending

This is not a new theme for Schiff. In an earlier post on X, he argued that the Big Beautiful Bill made the federal government "bigger and more expensive than ever" and that the burden on the public "will more than offset those fake tax cuts."

Rep. Thomas Massie (R-Ky.) made a related point in his own post, writing that "ALL government spending is paid for by citizens, through taxes, inflation, interest, AND debt (deferred tax)." Massie added that the bill increased spending by hundreds of billions of dollars over the next few years.

The Deficit Math Wolfers Is Worried About

The numbers behind the argument are hard to ignore. Treasury data shows the U.S. ran a $1.992 trillion deficit in fiscal 2026, with net interest of $1.052 trillion, more than the $965 billion spent on defense. Yes, you read that right: paying interest on the debt now costs more than funding the military.

In a separate interview with MS Now, economist Justin Wolfers said the U.S. is running its largest deficit outside a recession or war. His description of the plan in Washington was blunt: the government will "cut benefits for people who need them, cut taxes for people who do not, and borrow the difference."

Schiff's argument and Wolfers' numbers point at the same tension. Tax cuts are popular. Spending is popular. Paying for either is not. And when the bill gets covered through higher prices rather than higher taxes, the people who feel it most are the ones who were told they were getting a break.