The effects of different political parties on the US economy Essay

The effects of different political parties on the US economy - Essay Example Despite this, Reagan added his own brand of Big Government with the swelling of the National Debt under his watch which crippled the economy. Liberal and conservative economic ideologies cannot necessarily be connected with Democratic and Republican Parties respectively as this paper will illuminate. The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually the entire industrialized world. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920’s, and the extensive stock market speculation that took place during the latter part of that same decade. The misdistribution of wealth in the 1920s existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920s kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the misdistribution of wealth, caused the American economy to capsize. The ‘roaring twentie s’ was an era when our country prospered tremendously. The nation’s total realized income rose from $74.3 billion in 1923 to $89 billion in 1929 (Hicks, 1960 p. 110). However, the rewards of the (Republican) ‘Coolidge Prosperity’ of the 1920’s were not shared evenly among all Americans. According to a study done by the Brookings Institute, in 1929 the top 0.1 percent of Americans had a combined income equal to the bottom 42 percent (McElvaine, 1984 p. 38). That same top 0.1 percent of Americans in 1929 controlled 34 percent of all savings, while 80 percent of Americans had no savings at all (McElvaine, 1984 p. 38).