Arguments Regarding the US Economy from Conservative and Liberal Mindsets

The following is original material written by myself and submitted as a
term paper at the University of Florida (just GEO2500, not some high level course).
Please note that this term paper was written in July 2001.
This paper is protected under copyright. Please do not post this work anywhere without my permission.


I.          Introduction

            a. Brief History of the US' Two Major Political Parties

II.         The Conservative Mindset and its effects on the US Economy

a.   Low Taxes

b.   Incentive - Rewarding Innovation and Hard Work

c.   Hands off policy – laissez faire

            d.   The Invisible Hands of the Market

            e.   “Trickle-down Economics.”

            f.    Promotion of Business – Successful, large companies are rewarded.

III.       The Liberal Mindset and its effects on the US Economy

a.   High Taxes

b.   Hands on policy – regulated economy.

            c.   Restriction of Business – Inefficient, small companies are rewarded.

            d.   Poverty

            e.   The need to redistribute wealth.

            f.   Why the market cannot help everyone and there must be government intervention.

IV.       Modern Day Issues not Previously Discussed

a.     The Military

        i.   Policy

        ii.  Strategic Defense Initiative (SDI)

        iii. National Missile Defense

b.     Environment

                          i.  Policy

                          ii. Global Warming

                c.       Energy

                         i.  Policy

                         ii.  Types of Modern Power

                         iii. The Energy Crises

V.       Closing Arguments

VI.      Works Cited

    The Republicans and Democrats have similar and different views on how to handle the United States of America and its immense economy. Both of the parties are more ideologically alike than different. Both parties support the United States Constitution, private property, free enterprise, and our individual freedom. Both view government's role as a limited one, to varying degrees. They support majority rule and the due process of law. Both generally support the reforms made in the New Deal, such as social security, income tax, and welfare. (Goshen, Chapter 10 Notes)
    Republicans tend to be conservative and Democrats tend to be liberal. If you were to summarize the Republican philosophy on the economy, you would see three prevailing points. The party supports minimal government, lower taxes, and less government intervention. Republicans believe that economic success comes from innovation and hard work. The Democratic Party represents the "common people's" aspirations. Through a large government, high taxes, and social programs, they believe they can help bridge the gap between the wealthy and the poor.

Brief History of the United States’ Two Major Political Parties
    The two major political parties today can be traced back to the founding of the United States Constitution. At the time the document was drafted, two factions emerged: the Federalists and the Anti-Federalists. The Federalists consisted mostly of bankers and merchants. The Anti-Federalists, also known as the Democratic Republicans or Jeffersonian Republicans, consisted mostly of farmers and planters. When the Democratic Republicans broke up, the majority of its members went to the Democrat Party, starting with the Andrew Jackson presidency. Franklin D. Roosevelt completely changed the way government works and changed both of the parties a great deal, particularly his own, the Democrat Party.
   The Federalist Party ended in 1816. In 1834 it was rekindled under the name of the Whig Party. They were a loose coalition of groups united in their opposition to what party members viewed as the executive tyranny of “King Andrew” Jackson. The Whig Party ended slightly after the Civil War. The Republican Party came about in the early 1850’s on the issue of granting western lands to settlers and supporting the abolitionist movement. The Republican Party is the only third party is United States history to ever become a major party. The Republican Party, or GOP, formed in 1854. The party did not win an election until 1861 when Abraham Lincoln took office. (Goshen, Chapter 10 Notes) Ronald Reagan completely changed the way the federal government works when he undid many of the things Franklin D. Roosevelt created when Reagan dissolved power back to the states, in support of the ideals of the Republican party.

The Republican Argument
    Freedom is what our ancestors fought for in the Revolutionary War: freedom to do what we want with our lives and freedom from taxation without representation. It is a quality that most capitalistic countries cherish. This quality, freedom from big government and high taxes, could be said to be the basis of conservative beliefs. By having less government intervention in our economy, it allows the people to make more of their own decisions and control how their own money is spent. They can spend it on the social programs that they see fit, rather than the government making those decisions for them. Conservatives contend that the people of the United States are intelligent and that they know how to handle their own money for their own greater good.
    The tax system set up today is slanted so that the more wealth you have the more you have to pay. In fact, the top 1%, those whose incomes exceed $250,736, of America’s families pay 33.2% of our nation’s taxes. The top 10%, those making $79,212 or more, have to pay 63.2% of America’s taxes. Not only that, the top 33%, those with incomes greater than $35,000, have to pay 80% of our nations taxes (Fik, Dr. Timothy J., class notes, July 16th, 2001). That is, one-third of Americans pay four-fifths of the United State's revenue. This is how the liberals redistribute wealth. What does this do to the incentive to prosper? The answer is obvious. Those who work hard and try their best lose out on the fruits of their labor because it is handed over to a big government with many social programs as well as people who are lethargic and are living off the government. The more you earn, the more you are taxed. This system encourages people to live off the government, which leads to bigger government, more social programs, and more taxation of the upper and working classes to provide for them. “Government attempts to help low-income families by simply redistributing income undermine incentives to work harder and earn more” (Republican National Committee - President Bush Unveils New Tax Plan). Conservatives are greatly opposed to this. They will be still seen taxing the upper and working classes more, but not as much as liberals would. They would like to see a flat tax and tax cuts. A flat tax would cut back on much government spending as well, for it would drastically decrease the IRS. According to a government study, “the U.S. income tax code is a monument to unnecessary waste. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms. The IRS sends out eight billion pages of forms and instructions each year, which, if laid end to end, would circle the earth 28 times. Nearly 300,000 trees are cut down each year to produce the paper on which IRS forms and instructions are printed.” (The Flat Tax Home Page)
    Taxation obviously hinders the United States Economy. Corporations have to pay taxes just like every citizen. America’s corporations are very much concerned with the bottom line, profit. Corporations are paying more to the government than ever before and having to comply with constantly changing regulations. When a corporation’s profits go into the red, decisions that would hurt the United States economy are often made. Production goes down. Workers are laid off. Salaries are cut. Benefits are cut. The workers are consumers, and consumers without an income cut back on expenses. When people buy less it slows down our economy. “According to a study by an economist with the Congressional Research Service, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. Dale Jorgenson, the chairman of the Economics Department at Harvard University, found that each extra dollar the government raises through the current system costs the economy $1.39.” (The Flat Tax Home Page)
    Republicans think the people of America need a tax cut for a number of reasons. Federal taxes are the highest they have ever been during peacetime. We are paying more in taxes than we spend on food, clothing, and housing combined. We work more than 4 months of the year just to pay our tax bills. Also recent layoffs by businesses prove that our economy needs a boost (Republican National Committee - President Bush Unveils New Tax Plan). A great deal what we earn goes into taxes. The graph to the right shows how much of our money on average goes into taxes.
    Recently, President Bush passed a tax cut. It was a cut that gained support by Republicans and moderate Democrats. It was a tax cut that gave a large amount to the wealthiest of Americans; however, the greatest percentage cuts go to the low-income Americans. He did this though reducing the marriage penalty, giving a 100% tax cut to families of four under a $35,000 income, doubling the child credit, and cutting the 15% rate to 10% for the first $6,000, $10,000, and $12,000 for singles, single parents, and married couples, respectively. (Republican National Committee - President Bush Unveils New Tax Plan) It gives a tax cut to every family that pays income taxes. Eliminates the death tax and it Expands the charitable tax deduction. (RNC Tax Relief Information Center)
    Republicans support the philosophy of laissez-faire, which translated into English means “let things alone” (Laissez-Faire, Microsoft Encarta). It is a “policy based on a minimum of governmental interference in the economic affairs of individuals and society” (Laissez-Faire, Encyclopedia Britannica). The policy of laissez-faire received strong support in classical economics as it developed in Great Britain under the influence of Adam Smith. Adam Smith, arguably the founder of the conservative economic mindset, argued that private competition free from government regulation produces as well as distributes wealth better than government-regulated markets. Smith believed that private businesses seeking their own interests organize the economy most efficiently, “as if by an invisible hand” (Smith, Adam, Microsoft Encarta). Today, the invisible hands of the market refer similarly to Smith’s view: that “the laws of supply and demand as governed by needs, wants, and economic scarcity, as the ultimate guiding force in the allocation and distribution of human, physical, and economic resources” (Fik, Dr. Timothy J., p75). Republicans believe strongly in the efficiency of markets. Economic gains will lead to economic growth. All economic classes will feel the benefits. It has been proven that the benefits “trickle-down” the classes during the Reagan Administration. The economy prospered as taxes were lowered and tax revenues increased because people now had more money. However, liberals would point out that the Reagan Administration ran up a huge deficit, however this is due to the expansion of government caused by Congress. However, Reagan did sign what Congress passed so Congress cannot be singularly blamed.
    Republicans believe in the promotion of business. A nation’s economy greatly effects how great the nation is in terms of development. The government would be able to collect more revenue when business prospers. By controlling only a very small amount of the day-to-day affairs of businesses, they will have more freedom and will generate more revenue. This helps the working class. Efficient businesses mean cheaper products and wages in a given company sometimes increase when the given company does well. This increases stock, which helps the consumer even more in his or her long-term investments. Republicans are usually against regulations that would hinder the effectiveness of a business. This leads Republicans to be criticized for “being the bad guys that want to poison our children with arsenic and destroy the environment” (O’Reilly, Bill). This is simply not true. Republicans strongly believe in preserving the environment and keeping out waters clean, however, they do not believe in going to such extreme regulations that the environmentalists propose, thus the name calling.

The Democrat Argument
    The "American Dream" is something that should be accessible to all Americans. Many people have already achieved that dream. “The Democratic Party is committed to ensuring that all Americans have the opportunity to achieve the American dream” (DNC Position Paper – Proposition 209). Not all people of the United States have an opportunity to succeed. Many wealthy Americans are born into their wealth. They pass it on for generations. Large corporations can exploit the working class for their own benefit. Corporations will pollute the environment unless given incentives or regulations. The traditional capitalist system needs controls to protect the common people from big business. All of this shows how corrupt a capitalistic society can be and why we need a large government and more government intervention. Democrats want to provide “opportunity to every American… and are determined to reawaken the great sense of American community” (DNC Position Paper - Economy)
    The tax system, as it is set up today, makes the rich pay much more than anyone else. From the liberal perspective this is a very good thing. Who else is better suited to pay? Americans that make over $300,000 are more than capable to pay for the better good of all Americans and still live a very luxurious life. The graph to the right came from the Flax Tax home page showing how when you earn more you pay more. Republicans and Democrats both support this policy. However, the Democrats support it much more, which results in progressive taxes. “Liberals tend to support a regulated economic system, one that allows for the controlled distribution of wealth and the benefits of growth in accordance… with their objectives” (Fik, Dr. Timothy J., The Geography of Economic Development). The Democratic Party is opposed to a flat tax because it favors the rich, even though the rich still pay more. Democrats favor an “Earned Income Tax Credit.” It has nothing to do with how much one would pay, but has to do with how much one would get back. It is designed to help those making the transition from welfare to work. The Democrats helped 15 million working families by expanding the earned income tax credit in 1993. “This increased the maximum earned income tax credit to $2,152 for working people with one child who make less than $25,078 and to $3,556 for working people with two or more children who make less than $28,495. It also created a new $323 earned income tax credit for individuals aged 25-64 who earn less than $9,500 and have no children. Certain individuals are eligible to receive their earned income tax credit incrementally throughout the year in their regular paychecks.” (DNC Position Paper – Earned Income Tax Credit)
    If you refer to propaganda from both sides, the Republican tax cut is for the elite and the Democrat tax cut is for the selected few. For the past eight years, Democrats have been working to offer tax relief to the Americans who they see needs it the most. Democrats believe in cutting taxes for working parents who are trying to raise multiple children. They want to cut taxes for Americans whose children are in college or whom are continuing their education. They cut taxes for companies who hire those on welfare. They want to cut taxes for more than 90% of America's dynamic small businesses.
Where Republicans favor big businesses, that are successful and efficient, Democrats favor small business. This helps small businesses compete with the larger businesses that could easily put them out of business. This gives small businesses the opportunity to prosper. When the small businesses become larger their taxes increase. This keeps businesses small. Small businesses are less efficient than corporations. This leads to higher prices in the market.
    The liberals view poverty as something that can trap people. Urban decay and economic decline they see as something that will trap the poor into a never-ending tunnel of poverty. They call this the “culture of poverty” – “the disadvantaged people and regions held (or oppressed) within the vicious cycle of poverty, or those chronically hindered by adverse economic conditions and distress and subject to the array of social and psychological problems which stem from feelings or despair and hopelessness” (Fik, Dr. Timothy J., The Geography of Economic Development). Liberals contend that “trickle down economics”, the conservative ideal for the economy, won’t work for them. They believe that taxing the rich and redistributing the wealth to the poor is the only way they can be helped. They see this as a way that will help the poor more directly.
    Corporations may have set prices amongst a market. Airline corporations have basically the same price on flights. If one reduces its price all the others follow shortly, sometimes within hours. All the corporations can talk to one another to set a price so that there will not be price wars, when the constant reduction of prices leads to a price that may result in a loss of profit. This is great for the consumer but terrible for the corporation. Democrats and Republicans are both against a group of corporations deciding on their own price, however Democrats fear it more. When prices are set artificially, it acts as a monopoly. This leads further to the dim view of liberals on big business.

Modern Day Issues not Previously Discussed

The Military and the National Missile Defense
    The military is very important to the United States Economy. Of all the government spending, the spending that goes towards the military has the most multiplier effects. Large corporations develop technology and work out contracts producing products for our military. Lockheed Martin, Texas Instruments, Motorola, Textron, United Technologies, Boeing, Raytheon, and Rolls-Royce are just a very small number of the corporations that provide jobs to millions of Americans who contract military technology and goods to the United States’ military. The private sector is greatly helped by a large military, though it does have an enormous budget and takes up a very relevant slice of the federal budget.
    Both political parties support increasing our military to various degrees. They want to increase the pay of military personnel. They want to further reform the military retirement system and improve housing, health care, and childcare benefits to support the general competitiveness of military careers in the civilian economy. Both believe in improving the military technology and get our systems up to date. A difference that the DNC points out is that the President wants to update our nation’s military technology now and the Democrats want to skip this “generation” of weaponry
    An important aspect of our national defense is the Strategic Defense Initiative, or SDI, also referred to as Star Wars. Ronald Reagan initially introduced it in 1983. The goal of SDI was to have a system that would intercept and destroy incoming missiles in the air. This required a great deal of technology and from one hundred billion to one trillion dollars (Encarta, Strategic Defense Initiative). It included space and ground based nuclear x-ray lasers, subatomic particle beams, and computer guided projectiles – all under the control of a central computer system. (Encarta, Strategic Defense Initiative) It was thought unthinkable until recently when technological breakthroughs showed that this system is possible. It has been modified since the days of Reagan. It consists of six steps (see diagram). The first step if for the five satellites circling the earth to pick up any missile launch on the planet using plume detection. Next, radar on the earth would calculate the missile’s trajectory. Then, four to nine x-band radars on the Earth would determine if the missile is a real warhead or a decoy. An exoatmospheric kill vehicle (EKV) in a rocket to the site where the missile will be intercepted. Then, at a closing speed of 15,000 miles per hour, the EKV will maneuver and destroy the target using kinetic energy. The whole procedure would then be assessed at the Battle Management, Command, Control, and Communications network, the heart of NMD. (Center for Defense Information – National Missile Defense)
    The cost of NMD cannot be determined. In1995, the Library of Congress’ Congressional Research Service makes the point in an analysis: “The question of exactly how much has been spent on 'SDI' or missile defenses since its inception is controversial and problematic. Analysts do not all agree on what exactly to count and how to count it once identified” (Center for Defense Information – National Missile Defense).
    The Republican Party, in general, supports this massive project. Former President Clinton has said that a final decision to deploy NMD must await satisfactory answers to four criteria: “1) there must be a real threat; 2) we must have the technological means to address that threat effectively; 3) our response must be affordable; and 4) NMD deployment must not do unacceptable damage to the stability of current and future international security arrangements” (Center for Defense Information – National Missile Defense). The Democratic Platform responds saying “We reject Republican plans to endanger our security with massive unilateral cuts in our arsenal and to construct an unproven, expensive, and ill-conceived missile defense system that would plunge us into a new arms race” (2000 Democratic Platform). President Bush wants this project to be undertaken. In one of his recent trips to Europe, he announced his intentions. Some European nations, such as Italy and Ireland, support Bush. But in France, President Jacques Chirac identified this problem when he declared: “Nuclear disarmament will be more difficult when powerful countries are developing new technologies [NMD] to enhance their nuclear capabilities” (Center for Defense Information). Germany, Great Britain, and many other European nations share this view. The response of other, less stable countries could be even more dangerous. China and Russia might seek to enhance their own nuclear capabilities in response to the deployment of an American NMD system. At the G8 summit however, Russia greeted the President with open arms. They talked of reducing their nuclear warhead complement by even more than previously agreed to. Russian President Vladimir Putin, however, objects to the missile defense. The United States still seeks support: “We believe we know what the future needs and that will include missile defense, so we hope that we can persuade the Russians to find a way to move forward with us, if not, we’ll have to move forward on our own. But it's better if we can move forward together” (Powell, Colin). To proceed with advanced testing of a missile defense system, the United States would have to persuade Russia to accept significant changes in the Anti-Ballistic Missile treaty – signed with the Soviet Union at the height of the Cold War – or abandon the treaty.

The Environment
    The environment is an interesting aspect in the political parties. There is no market centered on protecting the environment. This points out the need for government intervention in protecting the environment. There are many spillover effects from either producing or consuming goods, or externalities, that damage the environment. The environment was a very important issue in the last election. After the second election debate, a CNN correspondent said that it may be the deciding factor in the 2004 election. Nearly all Americans support saving the environment, but to varying degrees. Both of the political parties support the environment. However, it is common knowledge that the Democratic Party Supports the environment more extremely than the Republicans.
    The Democratic Party supports many measures to protect the environment. Their Platform states that they want “cleaner air, cleaner water, and a safer food supply; a record number of toxic waste dumps cleaned up; new smog and soot standards so that children with asthma and the elderly would be able to live better lives; and a strong international treaty to begin combating global warming - in a way that is market-based and realistic, and does not lead to economic cooling” (2000 Democratic Platform). Democrats believe in giving Americans incentives to invest in driving more fuel-efficient vehicles, such as hybrids and liquid-hydrogen cars, to live in more energy-efficient homes, and using more environmentally sound appliances and equipment. They want to clean up aging power plants. They want to diversify the transportation system.
    Democrats believe in posing penalties as a price to pay for not acting more favorably towards the environment. Companies are fined when they do not meet the established environmental standards. They also want to impose restrictions to limit dangers, such as impact fees or taxes to recoup the cost of the damage inflicted on the environment. (Fik, Dr.Timothy J., The Geography of Economic Development)
    Democrats are greatly concerned with global warming. In their 2000 Platform they state that in the future “Much of Florida and Louisiana submerged underwater. More record floods, droughts, heat waves, and wildfires. Diseases and pests spreading to new areas. Crop failures and famines. Melting glaciers, stronger storms, and rising seas. These are not Biblical plagues. They are the predicted result of human actions. They can be prevented only with a new set of human actions - big choices and new thinking” (2000 Democratic Platform). If this information is true as the Democratic Party's scientists say, this may pose serious problems. Yet, as it is, none of this can be predicted as “fact”. Solar Flares from the sun may be causing Global Warming. Also, the average temperature for the Earth since it was formed is higher than it is today. Is our planet simply reverting back to a climate in which it used to have or have humans intervened too much and are actually now changing the very nature of our planet? The answer is unknown, but probably a little of both. It is possible, however unlikely, that the Democratic augment is true. The Republicans are aware of the changing nature of the Earth and its environment and have adapted a different stance than the Democrats.
    The Republicans firmly believe in preserving the natural beauty of our country. Republicans are devoted to making sure our skies aren’t full of smog and pollution they want to keep out air clean. Republicans want to ensure that our drinking water, streams, rivers, lakes, oceans and reservoirs are safe and clean. They want to preserve natural resources for centuries to come. Republicans want to preserve land for future generations through the buying of land like the Democrats, but they also want to get the private sector to preserve land as well. Individuals can buy land and set up a park and charge admission to generate a profit. This is impractical unless you are wealthy, but it is very much achievable as Thomas Jefferson demonstrates. “When [he] observed a natural rock formation, known as Natural Bridge in Virginia, he decided to protect and care for it. He promptly purchased the land, which included the bridge, to ensure its protection. To this day, it remains privately owned, preserved and protected. Thanks to the careful stewardship of private owners, thousands of people continue to enjoy the wonder of Natural Bridge each year” (Environment – Issues). This summarizes the Republican stance on the environment: private industries or individuals stepping forward for the better good. They do acknowledge that government regulations help these companies create more environmentally friendly products, but wants to minimize government research in these areas. President Bush is supportive of regulations to help prevent global warming, but did not sign a resolution that the UN tried to push because China ands India were exempt from the regulations.

    The two parties have very different stances on energy. The Republican Party believes in building new power plants, searching and drilling for more oil, building more oil refineries, opposes price capping, supports new nuclear power plants with uniform design, supports private involvement for developing new energy sources, and energy conservation. “Conserve your energy. That’s the message I’m sending to Congress today, in a comprehensive energy strategy” (Bush, President George W.). The Democratic Party does not have an energy plan. They do not have an energy section in their 2000 Platform. However, they did combine a small statement under the environmental section on what they propose to do about energy. Democrats acknowledge the abundant low-cost sources of coal, petroleum, and natural gas, but they want to use them “wisely” and “ensure that changes in the energy sector promote a workforce whose skills are expanded, utilized, and rewarded” (2000 Democratic Platform). Democrats encourage private and more government involvement in researching clean energy technologies. “We can make all our energy sources cleaner, safer, and healthier for our children” (2000 Democratic Platform). They encourage regulation of the nuclear energy industry and want more standards to protect our heath and our environment. Both parties promote using our energy recourses efficiently and conserving our energy. Democrats are especially for energy conservation. Republicans believe however, energy conservation can only go so far and new plants must be built to keep up with our demand for energy. The United States has an incredible demand for energy. The United States is the largest consumer of energy in the world. This shows how the Democrat’s argument of energy conservation is so incredibly important.
    Power generation in the United States comes in many different forms. Our primary source of energy is coal (see pie chart), followed by nuclear, gas, hydroelectric, and oil. The United States is heavily reliant on coal. It has been said that we are “At the Dawn of a New Coal Age” (Fik, Dr. Timothy J., Class Notes). Coal is our nation’s most abundant power source. It is also easily accessible. According to estimates, we have over two hundred years of coal left. However, of all the energies used by mankind, coal is the worst polluting. Also, the amount of coal remaining in the United States is not as pure as the deposits mined in the past. However, new innovations in the coal industry will allow the energy generated to have very little emissions, even none. “One technology Los Alamos is developing to achieve this goal is a zero emission process for converting a coal and water slurry into hydrogen, which is in turn converted to electricity via a high-temperature solid-oxide fuel cell” (Zero Emission Coal to Hydrogen).
    The United States has proven reserves of oil on hand but has limited production potential. The pie chart may be misleading. Oil does in fact account for only three percent of our power production, but it is also used by a great number of manufacturing industries, cars, and common appliances, which is not part of that three percent. The limited production potential can be attributed to the low profitability because of the price of crude oil being low. Reserving our oil for any disaster that may destroy a portion the world oil supply, such as another war in the Middle East is a good idea, however our reserve has not been proven to last more than thirty years. The world has about forty to forty-five years left of crude oil. From hydrocarbons, we will be able to make our nation’s oil supply last from seventy-five to one hundred years. If the world runs out of crude oil, the United States will not. There have been many factors attributing to high domestic oil production. There have been increasing oil demands, an increasing tax burden, and government restriction on exploration of oil reserves. OPEC is restricting its supply and the increased production does not keep up to the demand. OPEC’s uncertainties also increase process. The United States also has a fixed oil refining capacity because of the suppression of the industry by previous administrations, especially the Clinton-Gore Administration. (Fik, Dr. Timothy J., Class Notes)
    Alaska opens up great potential to our nations energy. Although it is impossible to know how much oil is actually where the drilling may be, predictions give us approximately thirty years, and forty billion to seventy billion barrels of oil. (Fik, Dr. Timothy J., Class Notes) However, drilling in Alaska is highly controversial. Environmentalists point out that it would be hurting the reserve and could harm the life there. However, there is very little life there. “It [drilling site] looks like the freekin’ moon!” (Fik, Dr. Timothy J., Class Notes). A more important question to ask would be if we really need more oil. The oil prices in the United States are much cheaper than that of Canada or Europe. Our average price per gallon is somewhere around a dollar and fifty cents. In Ireland, the price for gas is sixty pence per liter, or about five dollars a gallon. Also, what would happen if there was a world disaster and OPEC’s oil was wiped out? If we drill in Alaska right now to relieve our economy of rising oil prices, will we have any oil when we are at a time when we desperately need it?
    The second largest power source in the United States is nuclear power. Nuclear power, surprisingly, is very environmentally friendly. Nuclear power is a clean source of energy. It emits no harmful gasses into the air, which possibly contribute to global warming. It also takes up very little space. Nuclear power plants are very small compared to the giant coal and oil plants. The plants also generate tremendous amounts of power. One uranium nuclear fuel pellet the size of the tip of your little finger is equivalent to the energy provided by 1,780 pounds of coal; or 149 gallons of oil, as much oil as fits in three 50 gallon drums; or 17,000 cubic feet of natural gas. Nuclear power is far superior to any other source in operation short of the sun. (Nuclear Energy Institute) Nuclear power accounts for twenty percent of the United States’ and world’s energy. However, nuclear power is highly controversial. Critics argue against it bringing up the Three Mile Island incident and Chernobyl. These were serious disasters. However, corporations such as Westinghouse and forty other companies licensed to operate reactors have been working on nuclear power during the past thirty years in which the industry was suppressed (Nuclear Energy Institute). Major breakthroughs were made and nuclear power can be said to be safe. The chances of another meltdown are incredibly unlikely. However, estimates show that there are only sixty to seventy years left of uranium left on the planet; it is a nonrenewable source of energy.” (Fik, Dr. Timothy J., The Geography of Economic Development)
    There is an energy crisis in California. There is not enough power for the state. There are many reasons that contributed to this crisis. First, gas and oil prices are on the rise. Power companies need oil and coal to power the state. California also is a very liberal state. They have a great deal of pollution so the power plants were forced to have higher pollution control standards than the rest of the states. This raises the price of power. This causes the lobbying of public interest groups to put price caps on the price of power. President Bush did not want to intervene. Democratic Governor Gray Davis of California wanted the caps. By not placing the caps it allowed the power companies to keep producing power without loosing money. The wholesale prices of electricity have skyrocketed, jumping from an average of $30 per megawatt hour last year to $330 in January (California power crisis sends shock waves nationwide).
    The parties have different approaches to the Energy Crisis. The Bush Administration’s long-term energy plan includes “streamlining the design of generating facilities, creating conservation incentives and enacting structural reforms to state agencies responsible for oversight of energy production” (GOP Proposes Long Term Solutions to Energy Shortage). The Republican Party firmly believes in increasing our energy supply. "'The legislature can no longer deny the fact that a solution lies in increasing our energy supply,' said Republican Senator Bill Morrow. ‘Increasing our energy supply is critical to sustaining California’s economic health’” (GOP Proposes Long Term Solutions to Energy Shortage) Republicans argue that to protect consumers from skyrocketing power costs, you should increase supply, thus lessening demand. It would stabilize prices and allow for more affordable and reliable energy in the state.
    The Democrats have a totally different approach. They call for the companies to be investigated for selling power above what the price should be. They want to see price caps to protect the consumer from incredibly high power prices. Democrats want the government to research new types of power that would help cut down on greenhouse gas emissions.

Closing Arguments
    The Democratic Party is a party that supports the people. It favors large social programs designed to help the people of the United States. To do this they support high taxes and taxes aimed at the people who make the most. They support keeping watch on corporations for the better good of the planet. They support workers’ unions and the “common man”. They greatly support programs like welfare, Medicare, and Medicaid. The Democrats support a moderate national defense and making sure the environment is protected. They support earned income tax credits. They support trying to close the gap and help the poor become part of the middle class. Democrats “want an America that gives all Americans the chance to live out their dreams and achieve their God-given potential. [They] want an America that is still the world's strongest force for peace and freedom. And [they] want an America that is coming together around our enduring values, instead of drifting apart. Democrats are determined to renew America's most basic bargain: Opportunity to every American, and responsibility from every American.” (2000 Democratic Platform)
    The Republican Party is a party that wants to create incentives. The party allows for people to move up the classes though hard work and innovation without having to worry about being hit with heavier and heavier taxes. It is a party that supports large efficient corporations and wants them to develop new, cleaner, safer technology on their own though incentives. It is a party that supports a strong national defense and a relatively clean environment. It is a party that though hands off policies allow people to decide what to do with their own money rather than the government taking it from them and deciding for them. “Since the election of 1860, the Republican Party has had a special calling — to advance the founding principles of freedom and limited government and the dignity and worth of every individual” (Republican Platform 2000) Republicans “believe that from freedom comes opportunity; from opportunity comes growth; and from growth comes progress and prosperity” (Republican Platform 2000). That is the heart of the Republican Party.
    The Republicans and Democrats both have many ideas on how to proceed with the economy. All of their ideas are indented for a good purpose for what they see is right. Their ideas also have their faults. However, this cannot be avoided. No matter Republican or Democrat, they both want the best for the United States. Many issues were presented in this term paper. Even more issues were left out. They parties platforms touch on nearly every issue we are presently facing and to summarize everything they stood for would be nearly impossible. However, there is an underlying theme in what the parties want to accomplish. They want to do what they see is best for the United States, to varying degrees. How they want achieve these goals, however, greatly differs. The United States economy is massive and cannot be dealt with without serious thought. It is up to us to decide the future of our economy. We need to be a people informed about the issues our parties’ support and the nature of the economy. If every American knew how the United States economy works he or she would be able choose the best candidate for office. And it is up to these elected officials to work to support the United States by doing both what they think is right and by representing the voice of the people.

Works Cited

2000 Democratic Platform –

Bush, George W., President of the United States - Remarks by the President to Department of Energy Employees. United States Department of Energy

California power crisis sends shock waves nationwide – CNN -

Center for Defense InformationNational Missile Defense -

DNC Position Paper Earned Income Tax Credit - The Democratic National Committee -

DNC Position Paper – Economy - The Democratic National Committee -

DNC Position Paper – Proposition 209 - The Democratic National Committee -

Environment – Issues – National Republican Congressional Committee -

Fik, Dr. Timothy J.The Geography of Economic Development © 2000, 1997 McGraw-Hill Companies, Inc.

Fik, Dr. Timothy J. – Class Notes / Lecture.

The Flat Tax Home Page -

GOP Proposes Long Term Solutions to Energy Shortage California State Republican Caucus -

Goshen, KathyBishop Moore High School – AP Government and Politics – Class Notes.

Laissez-FaireEncyclopedia Britannica © 2001 Inc.

Laissez-Faire  - Microsoft Encarta Online Encyclopedia © 2001 Microsoft Corporation.

O’Reilly, BillThe O’Reilly Factor Fox News Channel

Nuclear Energy Institute -

Powell, Colin, United States Secretary of State – Commenting on the G8 conference and Bush’s trip to Europe.

Republican National Committee - President Unveils New Tax PlanTalking Points – February 7, 2001.

Republican Platform 2000 -
RNC Tax Relief Information Center -

Smith, Adam (economist) - Microsoft Encarta Online Encyclopedia © 2001 Microsoft Corporation.

Strategic Defense Initiative - Microsoft Encarta Online Encyclopedia © 2001 Microsoft Corporation.

The Difference Between Democrats and Republicans AP United States Government and Politics – Lesson 18, Handout 18. © The Center for Learning.

Zero Emission Coal to Hydrogen – Los Alamos National Laboratory -