What is the Stand?
What is most important for voters? According to James Carville in 1992, “The economy is stupid” has been the go-to answer for most people. However, it can be more difficult than you think to pin down the differences between the major parties’ economic policies. This article will examine where the two major parties stand on key economic issues.
Global economic strategy
The country is currently facing an economic crisis. The COVID-19 pandemic’s impact has caused a large loss in earnings for private citizens and a significant rise in unemployment. This situation is expected to get worse. The government must also deal with the fall in tax revenue as many Americans are now in a difficult situation.
Donald Trump has stated his commitment to get Americans back to work, which is a welcome message to many voters. However, it’s not the easy solution that it seems to be. Although some may argue that the issue is about prioritizing safety and the economy, the truth is that an uncontrolled coronavirus can have a significant economic impact on the economy, particularly if it causes long-term sickness. This is a complex balance.
Both parties recognize that financial stimulus is necessary to sustain the economy. The Republicans are focused on helping businesses stay afloat with tax relief and grants, while the Democrats focus on direct assistance to families and individuals. Particularly those who are most affected. No Labels, a consensus-building organization, has been working with people from both major parties in order to avoid deadlock and ensure that there is no disruption to the stimulus package.
Taxation
Ask any voter and they’ll tell you that Republicans favor keeping taxes low, while Democrats support more government and greater public spending. It’s more complicated when you look at the actual policy. Both parties currently focus on the high-income Americans. Democrats want to increase their taxes and tax long term capital gains the same as income. This would generate approximately $4tn in revenue over ten years, money that could be used to fund the government’s escape from the pre-pandemic recession.
Republicans claim that this would encourage the wealthy to domicil in the US and hit investment. Democrats counter that any short term slowdown in growth would be more than compensated by the long-term gains resulting from public spending in areas like infrastructure investment. Unusual unity in Congress is seen between Republicans and Democrats when it comes to arguing that the reduction of the deficit should not be a top priority.
Trade policy
In the past few years, the US has been increasingly isolated, withdrawing from several important trade agreements and most importantly, entering into a trade conflict with China. Joe Biden, a Democrat, argues that we must build alliances and that partnering up with other countries is likely to increase our chances of winning negotiations with China. Both Republicans and Democrats have expressed concern over the imposition tariffs on trading relations with “friendly” countries like Canada and Japan. If Donald Trump wins the election, it is possible that internal pressure from the party would lead to the tactic being rescinded or even dropped.
Spending on public health
Publicly-funded healthcare has never been more important than it is now. There are immediate and widespread concerns about how funding for the COVID-19 vaccine distribution should be handled, in addition to the ongoing debates over Obamacare. This isn’t as easy as it sounds. Because no vaccine is 100% effective and everyone’s protection depends upon others, it makes it hard for the disease spread. If the state covers everyone, those who are able to afford it will be more secure.
Joe Biden supports an expanded Medicare system. This would be in addition to private insurance. It would also apply in states that have not previously expanded Medicaid in accordance with national policy. Donald Trump has, however, stated that he would reduce the cost of Medicaid by changing the payment system for providers.
Housing
Millions of Americans are now at risk of being evicted due to the financial impact from the COVID-19 pandemic. Many others are struggling to find adequate housing in places they want to work and where their skills are needed most. It’s impossible to ignore the fact that the US is currently facing an acute housing crisis. The Republicans faced with this reality have called for solutions from the Federal Housing Financing Agency and Department of Housing and Urban Development. However, they have yet to propose any specifics. In the meantime, the Democrats have proposed a $15,000 refundable tax credit for first-time buyers. They want adequate funding to support all low-income families who are eligible for Section 8 assistance. Donald Trump and Joe Biden have clashed over the proposal of Donald Trump to lower zoning restrictions.
Student debt
The issue of student loans is closely linked to housing. This is a major reason for the decline in homeownership among young people. There are currently $1.4tn in debts (roughly $34,220 per person affected), and it is widely agreed that something must be done. The question now is: what? The Republicans refuse to talk about debt cancellation. However, Democrats are in a bizarre position where they promise to lower the federal student debt burden but not the private student debts. Both major parties’ radicals argue that student debts must be cancelled entirely.
Climate change
Climate change is the most contentious issue between the parties. Donald Trump has repeatedly denied that climate change exists. He has also refused to spend any money to address it. This is why he is slowly removing funding from organizations that have made commitments to this area. Joe Biden, on the other hand, believes it is essential to address it and claims that this could be the driving force behind an investment project by government that will stimulate economic growth. The issue is even more complex at the party level. Although most Democrats support the candidate’s approach, many senior Republicans disagree with him. Many feel that it is now crucial to take action in this area. While Biden is likely to push ahead with his plan if he is elected, Trump is more likely face internal opposition making it less certain that he will win.
Let me end with another quote. As the British Prime Minister Harold Wilson once said, “A week in politics is a long period of time in politics.” Both parties are continually changing their economic policy. The policy must deal with the world at any moment. You can best determine who you can trust with the unknown events of the next four-years by looking at the histories and wider beliefs of the parties.