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Published: Sept. 24, 2020, 11 a.m.

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Thebalance article

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Democrats and Republicans have widely different views on the economy. But once in power, candidates' actions don't always coincide with their party's views

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Economy (demand side vs supply side)

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• Democrats gear their economic policies to benefit low-income and middle-income families. They believe that reducing income inequality is the best way to foster economic growth. This belief is based on the idea that low-income families tend to spend extra money on necessities, which directly increases demand. 
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Workforce

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• Democrats, including 2020 presidential candidate Joe Biden, support raising the minimum wage to $15 an hour and then indexing it to inflation.
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• Republicans argue that raising the minimum wage could force small businesses to lay off workers. This belief is partially true. A 2014 Congressional Budget Office report said that raising the minimum wage would take 900,000 families out of poverty. At the same time, it would cost 500,000 workers their jobs.
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• Immigrants have driven two-thirds of U.S. economic growth since 2011.
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Tax preferences

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• Republicans say that tax cuts are the best way to create jobs, while Democrats prefer government spending.
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Just Follow the Money

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• CNN article: individuals to have run a company listed in the S&P 1500 between 2000 and 2017 through federal campaign finance databases, which include contributions to both congressional and presidential candidates as well as party committees.
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  • The result: 18.6% of CEOs consistently donated to Democrats, while 57.7% donated to Republicans, with the rest leaning toward neither party.
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A study from the National Bureau of Economic Research found that Democratic presidents since World War II have performed much better than Republicans. On average, Democratic presidents grew the economy 4.4% each year versus 2.5% for Republicans.
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According to an August 21 note from Liberum, a UK-based investment bank, historical stock market returns and gross domestic product data points to a stronger economic expansion under Democratic presidents than under Republican presidents. The firm looked at data going back to 1947

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