The economic growth of United States became even better in the 1900s which also brought about the disparity of wealth between the rich and the poor. The government and Wall Street have been working together in order to formulate laws that will favour the banks and the rich community (Penner). When there is a reduction of tax payment the rich will be able to continue investing and increasing their wealth while the poor may increase their wealth but it will not be same because they cannot afford to take risks with their wealth. The politicians also get their funding from the rich therefore, it is a fact that they will side with them more. This will leave the middle class and the poor people to fend for themselves therefore; they tend to give up on the fight against inequality in terms of wealth.
How did the Republican and Democratic parties recast themselves during the 1980s and set the stage for the unleashing of the winner-take-all economy?
The Democratic Party use liberal philosophy in that they believe that the government is the one in charge of regulating the economy of the country. In regulating this economy the wealth should be distributed in a way that it can benefit the poor. The republican have a conservative philosophy where they believe that even though it is the government’s role in regulating the economy, it is not their work to care for all individuals. This means that they believe it is people’s responsibility on how they want to live their lives whether poor or rich. In the 1980s, the United States was headed by a republican Ronald Reagan who brought about the theory of supply-side economist (Haggith). This brought about the reduction of taxes which aimed at increasing the earnings of the citizens. This will motivate the citizens thus they will work harder and generate more wealth. This was a good reasoning that could have benefited both the poor and rich because of the hike in salaries and more job opportunities but it ended up helping the rich more.
During Reagan’s leadership while the taxes were being reduced the social programs was being cut down. He also made it easier for people to take risks while investing by reducing the regulations implemented by the government for the consumers, environment and the working area. One of the weaknesses of Reagan when it came to economy was when he increased the budget for military during the Vietnam War. The Democratic Party refused the cutting of the social programs due to the increment of the military spending. This brought about the gross national debt almost as bad as the one in the World War II. The bad annual deficit was also experienced by the presidency of the George Bush I. The national debt was high in the Second World War and also in the reign of President Reagan and George Bush. The national debt reduced during the reign of republican president Clinton (Still).
In conclusion, the economy of United States has fluctuated over the years since the 1970s until 2012. In the 1970s, the economy was not good due to recession and also bad government decisions. In the 1980s, during Ronald Reagan’s presidency the economy increased due to the supply-side economics theory where taxes were reduced which created room for more investing. The national debt also increased due to the increment of military spending and also the push the democrats wanted the social programs funds to not be cut.
Gongloff, Mark. "The U.S. Has The Worst Income Inequality In The Developed World, Thanks To Wall Street: Study." The Huffington Post (2013). Print
Haggith, David. "Deficits, Debts and Democrats vs Republicans — US national debt in graphs by year and president ." Economic News Articles in The Great Recession Blog (2012). Print
Penner, E. "Our Financial Bailout." The Wall Street Journal (2008). Print
Still, Bill. "No More National Debt." Winchester: Reinhardt & Still Publishers; 2 edition, 2012. Print