Democrats vs. Republicans: The Economy
Do Democrats tax and spend? Do Republicans give tax breaks to the wealthy? The common man’s guide to explaining the difference.
Breaking news: I’m a liberal; so if there is any bias–I try my best to be objective–it will probably be migrating toward the liberal side of the political scale.
Democrats and Republicans both have different models for fixing the economy, but when it comes down to crunch time, when new ideas need to be implemented, what will each party’s platform do for our economy? Well, let’s begin with Economics 101. When I try to explain the economy, I first begin with supply and demand. Supply, in simple terms, is how much stuff is being made. Demand is how much consumers actually want to buy the stuff being made. When the housing crisis surfaced, demand for many products plummetted. This placed our entire economy in a big ship with one oar. So, naturally, demand for goods, especially long-term products and services (houses, cars, etc.) began to shrink. During this type of economic instability, there are too many products not being sold–stockpiles of cars line up at dealerships. So, in plain terms, demand was low and supply was high.
Now we get to dig into some political theory. Democrats generally believe that, during a recession, tax breaks should be administered to the middle class. This, they believe, will cause demand to rise and for the supply to begin rolling again. Republicans, on the other hand, are generally more worried about job loss than what happens on Wall Street. They believe that taxes for small business and the wealthy should be low, because small businesses and the wealthy employ people. By delivering these tax cuts, they hope to aid business owners in getting more people employed. However, this tactic misses the target in one obvious way: giving money to businesses will only create more supply; so if demand is low anyway, what will more supply do but fuel the problem?
This idea harkens back to the conventional vs. alternative medicine debate: should you treat the cause of the disease, or the symptoms? Democrats hope to create more demand, which would help solve the immediate problem, while Republicans would simply be treating unemployment, a symptom of low demand for products. Sure, thinking that getting more jobs back during a near-ten-percent unemployment rate sounds great, but it doesn’t solve the problem.