The economy suffered from stagflation, which is both double-digit unemployment and inflation. Reagan also used non-Republican policies to end the recession.
He increased government spending by 2. He almost tripled the federal debt. Most of the new spending went to defense. Trickle-down economics, in its pure form, was never tested under Reagan. It's more likely that massive government spending ended the recession.
George W. Bush used tax cuts to end the recession. Even though the recession was over, unemployment rose to 6. In , Bush cut business taxes. It's unclear whether tax cuts or monetary stimulus were what worked. That monetary policy also stimulated the economy. Economist Arthur Laffer showed how tax cuts provide a powerful multiplication effect. Over time, they create enough growth to replace any lost government revenue. The expanded, prosperous economy provides a larger tax base. Laffer warned that this effect works best when taxes are in the "Prohibitive Range.
Republicans who say tax cuts always create growth ignore this aspect of supply-side economics. Find out how Republican presidents have implemented their party's policies and how Democratic presidents have impacted the economy.
Accessed June 25, The White House. Calvin Coolidge Presidential Foundation. Ronald Reagan Presidential Foundation and Institute. Tax Policy Center. Congressional Research Service. Ronald Reagan Presidential Library and Museum.
Bush, The White House. American Journal of Managed Care. The Commonwealth Fund. Department of State, Office of the Historian. Corporate Finance Institute. Peterson Institute for International Economics.
Tax Foundation. Library of Economics and Liberty. On the one hand, this is to be expected, as political scientists have found that how we think about the economy is increasingly rooted in how we identify politically rather than in actual economic conditions. Take this data from Civiqs daily tracking polls , which has asked Americans about the economy each day since June These shifts are particularly striking for Republicans when considering the actual state of the economy.
Underlying these changes have been eye-popping shifts in economic performance. Look at the matrix of year trends depicted here:. Democratic districts, for example, have grown significantly more dynamic in the last decade. Related to these shifts have been dramatic demographic changes. In just a decade, Democratic-voting districts have become strikingly better educated and more diverse.
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Measure content performance. Develop and improve products. List of Partners vendors. Sometimes they seem far apart and sometimes their philosophies seem similar.
Historically, however, the Democratic and Republican parties have demonstrated a fundamental difference in how they deal with economic issues or don't. The Republican Party is generally considered business-friendly and in favor of limited government regulation of the economy. This means favoring policies that put business interests ahead of environmental concerns, labor union interests, healthcare benefits and retirement benefits.
Given this more pro-business bias, Republicans tend to receive support from business owners and investment capitalists, as opposed to support from labor. The Democratic Party is generally considered more willing to intervene in the economy, subscribing to the belief that government power is needed to regulate businesses that ignore social interests in the pursuit of earning a return for shareholders. This intervention can come in the form of regulation such as limits on carbon emissions or taxation to support social programs.
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