The Republican and Democrat Economic Ideals, Essay Example

As one looks at the differences between the Democratic Party’s positions on economic and the economic ideas of the Republican Party it may be tempting to get caught up in the political spin put forth by both parties. In their paper for the Eastern Economic Journal, Dan Fuller and Doris Geide-Stevenson argue:

As the pundits would have it, “tax and spend, bleeding heart liberal Democrats” and anti-government conservative Republicans despise each other’s economic philosophy. Republicans, according to Democrats, advocate a perverse version of free trade rather than fair trade. Democrats, it seems, abhor the Republicans’ willingness to ignore the needs of the working-class poor in order to serve the interests of the idle rich. Such characterizations, of course, are ludicrous, but continue to hold sway in part because they have some grain of truth behind them (Fuller, Geide-Stevenson).

While is may be difficult to identify the specific economic ideas that both parties profess, their respective party platforms can give us some understanding. Both the Republican and the Democratic Party platforms were developed during the 2012 presidential race and reflect both parties’ current positions. This paper will compare and contrast the Republican economic ideals with the Democratic economic ideals based on the two parties’ national platforms and other scholarly sources.

When it comes to economic strategy, Democrats favor demand side, Keynesian economic fiscal policy. Democrats believe that there is unfairness created by free market forces. They support government intervention to correct this unfairness (Moving America). According to The Free Dictionary, “Keynesian economics is basically, a policy that empowers the government to spend more money which then helps to stimulate the economy” (Keynesian).

Republicans, on the other hand, support supply side economics. They believe that the market should be free to self-correct since politicians are reluctant to make any decisions to correct market conditions (We Believe). According to The Free Dictionary, “Supply-side economics is basically, a policy that empowers the public to spend more money which then helps to stimulate the economy” (Supply-side).

Most recently during the October 2013 government shutdown, The Democrats are trying to stimulate the economy by empowering the government with new government spending on the Affordable Care Act or “Obamacare”(Moving America). The Republicans are trying to stimulate the economy by empowering companies to spend more money through less taxation and regulations with the repealing of “Obamacare” and by controlling the debt limit (We Believe).

After examining these ideological differences one might conclude that the two parties are at opposite ends of the political spectrum. When we look at economic specifics, however, we see that the Democratic Party and the Republican Party are not that far apart. In international economics, both parties disagree with the proposition that the growing international character of trade threatens labor or the environment. Regarding microeconomics, both parties now see a stabilizing role for the federal government. Republicans, however, believe that the management of the business cycle should be left to the Federal Reserve. Democrats disagree and believe that more activist policies by the government should be used. Both parties agree that appropriately designed fiscal policy can increase the long run rate of capital formation (Wittes).

Both the Democratic Party and the Republican Party disagree with the proposition that the distribution of income has little if any impact on economic growth and stability. However, the issue of income distribution continues to divide the parties with the Democrats believing that redistribution of income is a legitimate role of government. Republicans continue their opposition to this role of government. Both Democrats and Republicans agree with the proposition that recent welfare reforms have improved the effectiveness of the program and benefited recipients (Fuller, Geide-Stevenson).

Conclusion

Although the Republican Party is perhaps stronger in their support for a global economy, the two parties have increasingly similar views on open economy and international trade issues. While enthusiasm for the principles of free trade continues to lag within the Democratic Party, there is marked drop off of support for free trade by the Republican Party in recent years. With regard to macroeconomics, both parties are expressing what might be characterized as doubt about the inherent stability of the economy. Both parties seem to be coming close in their views about the need to reduce deficit spending. Economic issues with strong income distributional implications continue to separate the Democratic Party from the Republican Party. This difference also extends to the issue of regulatory efficiency. Democrats believe that government should play an active role in monitoring and regulating business. Republicans question the effectiveness of government to adequately regulate business. While both parties have distinct ideological economic differences, it is clear that they agree on more than their political posturing suggests.

Works Cited

Fuller, Dan, Geide-Stevenson, Doris. “Consensus on Economic Issues: A Survey of Republicans, Democrats and Economists.” Eastern Economic Journal, Vol. 33, No. 1, Winter 2007. Print.

“Keynesian economics.” The Free Dictionary. Web. 16 Oct. 2013.

“Moving America Forward.” 2012 Democratic National Platform. Web. 16 Oct. 2013.

“Supply-side economics.” The Free Dictionary. Web. 16 Oct. 2013.

“We Believe in America.” 2012 Republican National Platform. Web. 16 Oct. 2013.

Wittes, Benjamin. Campaign 2012: Twelve Independent Ideas for Improving American Public Policy. Washington, DC: Brookings Institution Press, 2012. Print.