USA has two major political parties namely the Republican Party and the Democratic Party. Each of the parties believes in an economic embedded on a particular economic theory. The republicans support a free market economic system as in the supply-side economics theory. This economic system became popular during the rein of President Ronald Reagan. The democrats, on the other hand, support government spending than private spending.
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The Republican Party
The Republicans uphold the free market system and individual productivity; they hold that personal productivity, fiscal conservatism lead to a free market which gives way to an economic boom. In one of their popular fiscal policies, Reaganomics (republicans) hold that GDP increases in reduced tax rates over increased small business enterprises hence generating more revenue to the government. According to them, support creation of more jobs and wealth. They further argue that graduated taxes are unfair and inefficient. To them, government spending is not as efficient as private spending.
In the society, republicans support the idea of private sectors helping the less fortunate in the society. They give loan and grants to organizations especially those founded on a particular faith. The aim is to create a welfare society. On the social security, the republicans opt for personal system insurance medical cover and a supplemented system for the elderly and senior citizens. They also support preventive health care system instead of an emergency system. Their stand on abortion is that the government should not fund it at any cost. On jobs and job creation, the republicans are of the opinion that increase in the minimum wage impairs the economy, as this would create deficits in job exports, alter prices of goods and services, and delay service delivery. According to them, there is need to allow workers to become members in various unions.
The Democratic Party
The democrats support a system of government spending in the economy. They believe that social welfare should get more government budgetary allocation that the military allocation. Their support for progressive taxes is aimed at creating economic equality by use of tax as opposed by the republicans. On social services, democrats hold that the government should spend on social security, Medicare and Medicaid as well as support various welfare programs for efficiency and social justice. Democrats hold that productivity of labor could be improved by the provision of social services as a way of positive freedom. Lower taxes especially for higher earners are supported by the democrats as a way of increasing economic opportunities.
The democrats support the progressive tax structures but their quest to adjust the alternative minimum taxes. The democrats opt for the quality and affordable health care for all including the reproductive health. Their policy is funding them and making it affordable. They favor a universal health care for all the USA citizens. They opt for the creation of a nationwide insurance coverage for all Americans, expansion of Medicaid and protection of the patients through legislation like the patient protection and affordable care act.
However, on trade, and especially international trade, the party’s different wings hold different opinions. The professionals support the idea of globalization on international trade. Democrats have overtime opposed free trade. This is a move seen to go against the economic globalization.