Benedict effective in fostering growth. The main reason

Benedict IkpesaLes StanalandGOVT-230514 December 2017TheEconomics Effects of Republican Growth Policies vs Democratic Growth PoliciesAgrowth policy is the state plan for economic, environmental, social, andphysical development of the state.

These growth policies are used as referencewhen planning the yearly budget. According to Antonio Fatás and Ilian Mihov, growth policies exert astrong impact on economic growth of a society (Policy volatility, institutionsand economic growth, 2005). These polices are very similar to the agenda of thegovernment, they are used to remind the government of what they set out to do.Over the years, the state has maintained certain growth policies even when thepresident is constantly changing.

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This is because even though the two politicalparties do not share the same ideas, they both want economic growth and theyrecognize the importance of continuity in development. It is also good that thetwo political parties have conflicting growth policies (Political Competition,Policy and Growth. Timothy Besley) Example of a growth policy can be a tariffon imported car brands to protect newly formed car companies from foreigncompetitors. This growth policy will help the American based manufacturer growand in turn employ more workers which increases employment and the GDP. Growthpolicies are very important for the growth and stability of the economy. Nowthat we understand what Growth Policies mean and their importance to society,we will now start discussing the growth policies proposed by The RepublicanParty and The Democratic Party to know which is better and why.Oneof the Republican growth policies is tax-cut which they argue will help fostermore investments.

The Democrats believe in progressive income taxation whichmeans the higher you earn the more percentage of your income go to taxes. TheRepublican policy is more effective in fostering growth. The main reason whymost people work is for the income and some people work two jobs just toincrease their income. Nobody will want to work more only to pay more taxes,which is why cutting taxes will result in increase of income because the takehome pay will increase and workers will also be more motivated to work.

Withthe workers motivated, they will become more productive and the economy willgrow. The tax cut will also affect businesses because they will be generatingmore profit which is a result of the reduced cost of production. In economics,businesses are assumed to be profit driven and by reducing their cost ofproduction, these businesses will produce more goods or services because theirmarginal revenue is more that their marginal cost.

As businesses produce moregoods and services, they will hire more workers which will reduce the unemploymentrate. Cutting taxes will result in more economic growth than increasing taxes,which is why it is the better economic growth policy.Oneof the policies proposed by the Republicans is reduced government regulationson the market place. The Federal Governments have various regulations in placeto regulate the activities in the market place and the Republicans do not wantthe government to intervene in what happens in the market. However, theDemocrats want the government to keep these regulations.

The Democratic Party Policyis better in serving the general public because without governmentinterventions in the market place, there will be no quality control and bigcompanies will turn into monopolies in the market place. The market by natureis designed to serve the people who want and can afford the goods and servicesit provides. So, the market does a poor job in distributing goods and servicesto everybody. The Democrats policy is better because it will ensure that goodsand services are more evenly distributed and ensure that monopolies do notexist so that quality of goods and services do not deteriorate.TheDemocrats propose the reduction of government spending on defense. They arguethe money spent on defense can be used to finance social welfare programs. TheRepublican proposed an increase in defense spending by the government.

Theyargue that defense should be the priority of government because the governmentis responsible for protecting life and properties of the people. The Democratsplan to reduce government spending on defense will create a situation where ourmilitary will be underfunded. Without proper funding, the military will bevulnerable to any foreign enemy and because they do not have the appropriatefinances, they will not be able to protect us.

The Republican approach towardsmilitary spending is better because, there won’t be an economy is there isnothing to defend it. The protection we get from the military is critical inhaving a stable economy or even having an economy at all. The main reasonpeople work hard to acquire property is because they know they will be able tokeep it. If we start cutting our military budget we also start reducing thepower of our military and the protection they offer. There is currently arising tension between North-Korea and The United States and it has been goingon for a long time.

North-Korea is threatening to go to war with the UnitedStates, but our military power is the only reason they are holding back (BBC,2015). This is an example of how the military offers us protection and theRepublican policy to increase its budget is the better economic growth policy.TheRepublican and Democratic Party have taken two very different approaches on settinggrowth policies and they both argue that they have the better growth policy.However, the Republican Party has the best growth policies that will encourageeconomic growth in our society. Their tax cut policy will increase profit marginsfor all industries and this will make them expand and create jobs which willreduce our unemployment rate. Their policy to increase government spending ondefense will ensure that our lives and properties remain secure and encouragepeople to accumulate more wealth which is good for our society.

With thesegrowth policies, the Republicans will create an environment that will result ineconomic growth which is why they have the better economic growth policies.             Works CitedBesley,Timothy, et al. “Political Competition, Policy and Growth: Theory and Evidencefrom the US.” Review of Economic Studies, vol. 77, no. 4, 2010, pp.

1329–1352., doi:10.1111/j.

1467-937x.2010.00606.

x.Fatás,Antonio, and Ilian Mihov. Policy Volatility, Institutions and EconomicGrowth. Centre for Economic Policy Research, 2005.

“HowPotent Are North Korea’s Threats?” BBC News, BBC, 15 Sept. 2015.

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