A Different Kind of Polly: Political Parties
Hello again! I hope everyone had a wonderful Thanksgiving, indulging in all of the delicious food and family drama or taking to social media to make everyone aware of the fact that hello! We still mistreat America's indigenous people! Regardless, I hope it was a good time for everyone. Today we're talking Polly, and no, not the retro doll that was the equivalent to a miniature Barbie. Politics! More specifically, political parties.
Political parties are basically groups of people who share a lot of commonalities both socially and economically coming together to make a change. Sounds a lot like interest groups right? Wrong! The difference between the two is that politicals parties seek to influence via candidates being elected into public office whereas interest groups look for candidates to do their bidding. The purpose of political parties is all about power and influence. They want it their way, or the highway (though in politics there is always compromise). Political parties look for control over big issues ranging from abortion rights to their countries taxation system.
But this time around I want to focus on economics and taxes. Earlier today I was a question was posed to me: In America, what political party is best suited to shape a prosperous economy?
I don't like to choose sides (I mean, I am a libertarian), so this was a challenging question to answer. But I've come to one conclusion: context matters. Regarding "success" being only about a booming economy, Republicans would be best suited.
Let's take it back to good ole Reaganomics. During Reagan's presidency, he was infamous for his part in the astounding turn around of our economy post Jimmy Carter. He not only reduced inflation from 12.5% to 4.4% (NYLN) but also created jobs, lowered unemployment rates and boosted the economy by 1/3rd!
If you don't believe me, take a look for yourself:
(Source: An Economic Sense)
Now some of you may be wondering what the heck a GDP is. It's short for Gross Domestic Product, and the general gist of it is that it measures how well an economy is doing. If the GDP is high, the economy is in good shape! If the GDP is low that means the economy is collapsing, and it some severe trouble. Reaganomics was based on four pillars: the reduction of government spending, taxes, government regulation and tightening money supply to help decrease inflation.
There is one trend in this graph though that is hard to ignore. From quarter 2 through 8, there was a tremendous drop in the change of GDP. On the contrary, there was a massive increase in the GDP from then on out, this could be because he wanted to make some considerable changes to America's economy, and he tried to make those changes fast. Sometimes, when undergoing dramatic change, the initial results can be a little dicey since most political shifts need many years to implement even the most minuscule of changes.
Though of course, Reaganomics had its downfalls.
While yes, he improved our economy tremendously, he did it at the expense of the middle and lower class. There was an increase in private wealth, but poverty levels had risen. Not only that, but our national debt increased by a whopping 25%.
As you can see here, Reagan increased national debt more than a vast majority of those who came before and after him. Another thing I found particularly interesting about this graph is that despite Reagan and Bush, most republicans and democrats tend to increase the national debt by a similar percentage. Maybe these two frenemies aren't so different after all.
Despite national debt though, the economy was undeniably well off. National debt does not necessarily equate to a failing economy, many presidents have been able to improve our economy while increasing national debt. After all, it takes money to make money.
Political parties are basically groups of people who share a lot of commonalities both socially and economically coming together to make a change. Sounds a lot like interest groups right? Wrong! The difference between the two is that politicals parties seek to influence via candidates being elected into public office whereas interest groups look for candidates to do their bidding. The purpose of political parties is all about power and influence. They want it their way, or the highway (though in politics there is always compromise). Political parties look for control over big issues ranging from abortion rights to their countries taxation system.
But this time around I want to focus on economics and taxes. Earlier today I was a question was posed to me: In America, what political party is best suited to shape a prosperous economy?
I don't like to choose sides (I mean, I am a libertarian), so this was a challenging question to answer. But I've come to one conclusion: context matters. Regarding "success" being only about a booming economy, Republicans would be best suited.
Let's take it back to good ole Reaganomics. During Reagan's presidency, he was infamous for his part in the astounding turn around of our economy post Jimmy Carter. He not only reduced inflation from 12.5% to 4.4% (NYLN) but also created jobs, lowered unemployment rates and boosted the economy by 1/3rd!
If you don't believe me, take a look for yourself:
(Source: An Economic Sense)
Now some of you may be wondering what the heck a GDP is. It's short for Gross Domestic Product, and the general gist of it is that it measures how well an economy is doing. If the GDP is high, the economy is in good shape! If the GDP is low that means the economy is collapsing, and it some severe trouble. Reaganomics was based on four pillars: the reduction of government spending, taxes, government regulation and tightening money supply to help decrease inflation.
There is one trend in this graph though that is hard to ignore. From quarter 2 through 8, there was a tremendous drop in the change of GDP. On the contrary, there was a massive increase in the GDP from then on out, this could be because he wanted to make some considerable changes to America's economy, and he tried to make those changes fast. Sometimes, when undergoing dramatic change, the initial results can be a little dicey since most political shifts need many years to implement even the most minuscule of changes.
Though of course, Reaganomics had its downfalls.
While yes, he improved our economy tremendously, he did it at the expense of the middle and lower class. There was an increase in private wealth, but poverty levels had risen. Not only that, but our national debt increased by a whopping 25%.
As you can see here, Reagan increased national debt more than a vast majority of those who came before and after him. Another thing I found particularly interesting about this graph is that despite Reagan and Bush, most republicans and democrats tend to increase the national debt by a similar percentage. Maybe these two frenemies aren't so different after all.
Despite national debt though, the economy was undeniably well off. National debt does not necessarily equate to a failing economy, many presidents have been able to improve our economy while increasing national debt. After all, it takes money to make money.
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