No Matter What Your Top Concern Is, Democrats Are The Better Option: Part 1 Economy

Pew has come out with a new poll, showing what the top concerns are for voters in this 2022 midterm election. You can see the full results here: https://www.pewresearch.org/politics/2022/10/20/midterm-voting-intentions-are-divided-economic-gloom-persists/

To sum up, the following are the top concerns:

1. Economy (79%)
2. Future of Democracy (70%)
3. Education (64%)
4. Healthcare (63%)
5. Violent Crime / Energy (both 61%)
6. Policies impacting elections (58%)
7. Gun Policy (57%)
8. Abortion (56%)
9. Supreme Court Appointments (55%)
10. Foreign Policy / Immigration (both 54%)

Voters also expressed their ideas about who would do better on each topic, with the following results:

Republican Lead	Amount Of Lead	Voter Interest		Democrat Lead	Amount of Lead	Voter Interest
Economy	13%	79%		Future of Democracy	6%	70%
Violent Crime	17%	61%		Education	5%	64%
Foreign Policy	8%	54%		Healthcare	24%	63%
Immigration	29%	54%		Energy Policy	2%	61%
				Policies around Elections	7%	58%
				Gun Policy	5%	57%
				Abortion	26%	56%
				Supreme Court Appointments	13%	55%
AVERAGES	16.75%	62%		AVERAGES	11%	60.5%

As you can see, the Democrats are ahead on far more topics of concern, but their lead is smaller and statistically their voter interest average is also smaller. This is partially because of variety of topics they lead on, but also because the economy score is so high. While Democrats cast a wider net, Republicans have focused leads in their preferred topics.

While this poll can show WHAT people are concerned about, what this poll doesn’t show is WHY people favor one party or another for that topic. Of course party propaganda plays a role, but general perception is also impacted through investigating actual proposals and actions of each party on their respective topics. In that vein, I would like to take you though these topics and express why, IMO, the Democrats are the better option in every single topic.

NOTE: this will not be a diatribe about how the Republican party is a cult of anti-democracy extremists with radical Christian nationalist idiots as their candidates. For one, it’s not productive, and for another, those candidates draw far too much attention and could use a sit in the corner. Instead, we will focus on the actual impacts and proposals of each party, not per person, but as a whole.

Economy

Republicans have, for as long as I can remember, been seen as the leaders in terms of fiscal policy and how it impacts the economy. This despite the economy declining under Republican Executive influence very consistently, the failure of supply side economics, and the establishment of the Middle Class by Democrats.

Much of this is because of how the economy works; the impacts of economic policies are often not felt until far after it was implemented. This is why President Biden has been stuck with an economic downturn (impacts from the pandemic, which is not primarily the fault of Republicans, though shoddy policies from the Trump administration exacerbated it greatly). It’s why Trump benefitted from a rapidly declining unemployment rate. It’s why President Obama had high unemployment and low GDP rates in the start of his term. It’s why President Bush had a stalled economy after the Digital Boom of the late 1990s. Etc etc etc.

However, that only looks at executive action, and this election isn’t about the executive branch. The public often forgets that Congress has the most direct impact on the economy, and it is their policies that Presidents often have to wade through in their actions. So to understand the economic argument, we have to examine the Congressional actions of the past and the proposals for the future by both parties. Let’s start with the Republican party.

Republican Economics

Politically, modern Republicans are for deregulation, tax cuts, low government spending and anti-welfare policies. They are for more protectionist attitudes toward trade, having taken a turn against globalization, and they are against renewable energy investments. Typically they are also stronger supporters for nuclear power, though that is slowly evening out. They favor corporate stimulus and oppose social (read: for the regular person) stimulus.

A few of these policies have theoretical merit. Deregulation can indeed speed up an economy and innovation if it correctly targets needless or overbearing regulation. Requiring an 8% liquidity capitol stock for banks might help cool the economy and stabilize the financial system against large debacles like in 2007, but requiring banks double (or in some cases triple) that stock in 2 years is practically begging for some to fold under the pressure or take dangerous shortcuts. Several stock regulations keep regular people from participating in the market. Antiquated zoning laws stay not because of current reasoning but more because of old decisions that may not apply anymore. And deregulation can also help socially. Regulation barring terminal patients from trying experimental treatments are taking a last chance and personal right from an individual. Taking that away increases personal freedom and might (though the chance be small) save their lives.

Where they fail economically is threefold:

1. A dogged adherence to failed supply side economics
2. Low interest FED lending rates
3. Lack of investment in government structures

The first is probably the most egregious. In the 1970s this theory emerged that giving more capital (especially liquid capital) to business owners and wealthy investors would lead to overall economic growth, as these people would be more free to invest and grow their companies, providing more jobs and investing in their workers. In reality, as shown in every economic analysis done on the subject, additional revenue and revenue retained by massive tax cuts were put to either personal profit or to non-labor economic sectors (read: interest rate swaps, CDOs, etc, products that do not deliver actual resources to the companies they impact, but play with their value). Very little if any ended up “trickling down” to everyday Americans.

Even so, the GOP has refused to move on from this policy, continuing to push the idea that lowering taxes for extremely profitable businesses will somehow stimulate the economy. All it does in reality is greatly reduce government revenue, shooting the deficit up higher while doing nothing to curtail corporations moving labor and economic input to other nations (one of the stated reasons for lower taxes being it would retain these things in the USA).

The second is actually shared with Democrats, as they too support low FED interest rates. Americans are deathly afraid of deflation, so they want inflation to remain at least 2%, and all the FED policies in the last few decades have pushed for more easily accessible (read: low) loans, especially for business interests. The problem with this is that the FED also has to supply the cash along with those loans, and that means pumping more and more money into the economy. This is the largest driver of inflation, and as we are now growing that amount by around 7% (twice as much as we actually grow the economy in good times (3%)), we are causing a bubble that is popping right at a time of global inflation and supply chain issues.

The last point relates to the basic modern Republican idea that government is bad. The USA has a multitude of government structures, from mail delivery to road construction to utilities to energy production, etc. Most Republican plans do not adequately fund any of those, and seek to make cuts instead. This isn’t coupled with any real alternative, only a belief that the market will pick it up. Even if the market would pick it up, there is no reason to believe they would have the same goal of serving the American people, more likely taking shortcuts and inadequate care to boost profits. Companies have (and should have) different motivations from government entities, so putting our health, utilities, roads etc in their hands with the hope they’ll help when asked is a very naïve and historically unsubstantiated belief.

The other part of this is a basic lack of interest and investment in the welfare of the people of the USA. Being very anti-welfare, they do not concern themselves with investments in social care, health, education or other public service. They believe that the market will provide these services (once again banking on them being benevolent) and that the government only makes things more complicated and expensive. On the former they certainly have evidence (and are often the cause, making complex rule structures for using government resources), but on the latter they are often incorrect, as mass action reduces costs significantly, and government systems are not profit driven.

Overall, Republican economic policy fails to address the deficit, uses utopian thinking while ignoring real outcomes, and focuses on short term unsustainable growth for already well-earning entities. Under Republican governance, social care, healthcare (access and outcomes), education and infrastructure tend to suffer negative impacts, which in turn reduces economic activity as less people can work or work in high revenue industries. Economically, their policies make no sense and have demonstrated negative outcomes both on the national, state and individual levels.

Democratic Economics

Let’s look at the alternative, the Democratic Party. I say that explicitly because while there are plenty of alternative ideas, there realistically is only one other political alternative given our current two party lock on governing. You’ll probably find as I did that there is quite a bit of overlap, despite this being the item both parties bicker over the most.

Politically, modern Democrats are for market regulation, high earning (and windfall profit) tax increases, government investment, social stimulus (occasionally) and individual welfare. They are globalist in trade policy, preferring a wider net of economic activity, but contradictory also support harder sanction rules on nations engaged in anti-human rights behaviors, often at an economic cost to trade. Democrats strongly support renewable energy production and are coming around to nuclear power investments, and are strongly against coal, oil and other high polluting industries. Politically they oppose corporate welfare, but often agree to do so anyway.

As with the Republicans, these policies have theoretical merit. Market regulation works when applied correctly, enabling more innovation, competition and increasing access to investment opportunities. Windfall profit taxes work in other nations and do not cause a downturn in economic activity or chase companies away. Social stimulus, even direct stimulus, has proven in multiple economic experiments to raise economic activity and quality drastically, given the investment in people and thus increasing their spending power. And global trade agreements reduce costs and provide access to competitive markets for goods and services.

However, Democratic policies also have economic failings, the top three of which are:

1. Same bad FED policy as Republicans
2. Large, expensive and often complex welfare programs
3. Prioritizing social movement and environmental issues over economic activity

We already covered the FED policy and the damage it does in the section above. However, I give the Democratic Party more flak for this because they IMO are less honest about it. While the Democratic Party imagines themselves on the side of the people versus Republicans on the side of corporations, in this they are both firmly on the side of the latter, causing well-known damage to the economy so that interest rates stay low for businesses. We are far outpacing our economic growth, and this as noted above is one of the biggest drivers of inflation, negatively impacting Americans everywhere.

The second part is usually the attack leveled at the party by opponents, accusing them of being obsessed with large government programs and control. There is merit to this accusation; Democrats do create large, expensive and complex programs, and the spending on these programs is often the largest part of any government budget. However, there are two parts to this accusation that are misleading. For one, the complexity is often introduced by Republicans, creating labyrinthine requirements for people to gain access to government support or creating very stringent review requirements that cannot be covered with simple oversight. This in turn also costs far more in administration and leaves more people unserved than was intended. This often causes a Democratic policy to fail to meet expectations, which it can be argued was the goal of the Republican party in showing that it wasn’t going to work. How much of that is natural versus created is up for debate.

The second misleading part regards government’s role in general. Democrats believe governments have a duty to the general welfare of the people. Republicans believe the government has a duty not to interfere economically. Both claim Constitutional basis for their stance, with Republicans pointing to clauses wherein government leaves most of the regulation to the people or states, whereas Democrats point to the “provide for the general welfare” part. While I think Democrats have a stronger claim, I agree with Republicans that as it stands the programs interfere far too much, are too complex and are too expensive. Again, much of it is due to their interference, but a lot of it is also in overly complex design and overreaching by Democrats.

The last failing is a hot button issue, and often why Republicans can successfully paint Democrats as being worse in economic policy, despite the outcomes of most Democratic policies being better than that of their opponents. Democrats will often prioritize environmental, social and human rights concerns over economic impacts. They are very moralizing about this, pointing out that these human values are important and that economic growth is relatively not. They create their own image as willing to gut the economy if it means better human rights and environments, and they proudly boast of this.

Which is all well and good, until you need food on your plate.

This is IMO the largest failing of logic from Democrats. Yes, human rights, civil rights and environmental impacts are important. But they go too far in two areas: absolutism and globalism.

Absolutism means they take the side of human rights and environmentalism every time, even if the gain thereof is far less than the loss economically. It is again utopian thinking, and a bit of virtue signaling. Sometimes, especially for governments, you have to make the hard call to make sure the least amount of people suffer. Governments should not force a larger population to suffer for the gain of the few. This is true for tax policy AND human rights, though it is a hard pill to swallow for most Democrats. Societies must choose to help minority groups; being forced into it will never work. Even for our own civil rights movements, it took a majority of PEOPLE to support them before government action was truly effective. There will of course always be large population clusters of resistance, but that too is why absolutism will never work: it always causes an opposing backlash.

Globalism is often used as a boogieman by the Republican party, so let me be clear: I am not critiquing the idea of global trade and travel. I am talking about how our moralizing on other nations negatively impacts our economy. Democrats are particularly sensitive to this, making strong statements against human rights violators and then needing to go beg them for economic favors later (see Saudi Arabia). There is an argument to be made for this action, of course; human rights abusers are destabilizing forces for economics as well as general human welfare. But too often Democrats are absolutists about this too, especially the Democratic voter base. Sometimes, you have to do business with bad people to help the most people, and this Achilles heel of the Democratic Party will always be used by Republicans to dismantle any claim to economic superiority.

Economic Impact

With all that being said, what are the actual impacts from Democratic policies versus Republican ones? It’s not as simple as you may think. We can compare GDP growth versus congressional control, for example, as shown here:

https://www.macrotrends.net/countries/USA/united-states/gdp-growth-rate

We can apply the control of Congress here, with a year offset (to make sure economic policies can actually take effect). Doing so shows the following:

As you can see from this chart, there are mixed messages. Democrats controlled Congress solidly from 1961-1981, and there were ups and downs. Then Republicans took it, spiked growth, and then settled at a lower growth than the previous 20 years average. Democrats took it back in the early 90s, saw a quick downturn but brought it back, then it crashed again after 4 years of GOP rule, only going back up in a split Congress. Restored Republican control saw it fall again, while Democrats taking it back in 2008 brought it back to the previous growth levels. Republicans took over in 2016, largely with the same results, until the COVID pandemic collapsed the economy in 2020. Growth now under Democratic control is a mix of recovery from the pandemic and economic stimulus.

This shows why the economic myth exists, IMO. For 20 years, Democrats controlled Congress through good and bad times. Then when Republicans finally took control, they did so at a time of recovering from a negative period, as well as spiking it higher than it was before for a single year. However, right after that it settled to lower than the Democratic averages of the past, and future Republican control saw only decline in growth, with an exception in 2018 with a higher growth rate than in previous years. Meanwhile, every period where Democrats controlled Congress, or had split control, growth increased, with the exception of the early 90s recession and the immediate aftermath of the 2008 global financial crisis. So it’s strange that one well-pushed narrative about one year of Reagan’s term outshines the actual numbers, but it’s not rare in US political discussions, sadly.

We can also look at government deficit and spending, as these are more directly controlled by Congress:

Here we see that deficits went up under Republicans during Reagan, then down under Democrats. It then popped into a surplus under Republicans, but then quickly tumbled into a massive deficit under them as well. Democrats brought down the deficit during the 2010s, and then when Republicans took over the deficit spiked, first gradually and then with COVID massively. It has also been reduced massively in the last years.

So here too it looks like the Republicans spend more money that we don’t have as a nation, plunging us into deep deficits with a single exception in the late 90s. Democrats, conversely, oversee reductions in deficits almost universally.

Conclusion

Republicans rely on utopian thinking and denial for economic policies that have shown no positive impact. They refuse to invest in the nation and instead consider government to be a blocker to economic growth, relying on the supposed benevolence of corporations.

Democrats rely on overarching government structures to provide for the general welfare, and will often jettison economic considerations in favor of civil and social ones. However, it is undeniable that economically their stewardship grows the economy more while costing the government less.

Both fail to grasp the source of inflation problems.

Democrats have a strong history of positive economic impact and lower deficits. Republicans have a long record of negative impacts on the economy and high deficits.

Right now there is a choice to be made regarding who is better for the economy, and every record and stance points to the Democratic Party. Furthermore, there is no economic policy presented by the Republican Party to actually address inflation or costs in general, and they vote against every attempt to address economic problems, be it high medical costs, low wages, or infrastructure.

As the title proclaims, Democrats Are The Better Option when it comes to the Economy