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AP®︎/College US Government and Politics
Course: AP®︎/College US Government and Politics > Unit 4
Lesson 9: Ideology and economic policyPolitical ideology and economics
Explore how political ideologies influence economic views, with liberals favoring larger government, higher taxes, and increased spending for a safety net, while conservatives advocate smaller government, lower taxes, and less regulation for economic growth. Libertarians seek minimal government intervention, and both liberals and conservatives practice some form of Keynesian economics.
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- At, Sal says "but if we were talking about social issues, it would be the other way around. Libertarians would have a lot more in common with liberals than conservatives on social issues." So, libertarians support abortion? 1:12(3 votes)
- So Libertarians are different than Liberal?(1 vote)
- Very. Liberals will tend to support larger government influence on everyday life, while libertarians want as little government influence on public life as possible.(2 votes)
Video transcript
- [Instructor] What we're gonna talk about in this video is how various
political ideologies can affect folks' views on economics, and when we're talking about
economics and government policy around economics, there's
two fundamental types. There's fiscal policy, which we will focus
mainly on in this video, which is the idea of how
much does the government tax, and how much does the government spend, and this is fundamentally in
control of the U.S. Congress. Then you also have monetary policy, and these are ideas around interest rates and the money supply in service of keeping the economy strong without having inflation run amok, and this is controlled
in the United States by the US Federal Reserve System. Now if you were to put the
various ideologies on a spectrum, it might look something like this, and I put liberal ideology on the left because it's often associated
with a left leaning ideology, and I put conservatives and on the right because it's often described
as a right leaning ideology. Libertarians are interesting
because, if we're talking about economics, they
have a lot more in common with conservatives than
they do with liberals, but if we were talking
about social issues, it would be the other way around. Libertarians would have
a lot more in common with liberals than
conservatives on social issues. In general, Libertarians want
less government intervention on either dimension, on
economics or social issues, but now let's focus on
the entire spectrum. So if we were to think about liberals, what's your sense of how a
liberal might think about, say, fiscal policy, taxation,
and government spending? General speaking, liberals
favor a larger government, and this larger government
happens through higher taxes, higher taxes, and higher government spending
and more government programs. Higher spending, and the reason why they tend
to favor a larger government is they will invoke ideas
of a safety net that in a wealthy society everyone
should be provided for on some level. They might invoke ideas of fairness. They also believe that a
larger government is out there to protect the citizenry from
being taken advantage of, and so they'll also favor more regulation. Now conservatives would
take the opposite stance. They tend to favor smaller government, smaller government, and it would be in the
form of lower taxes, lower taxes, lower spending, lower spending, and less government regulation, less regulation, and they'll make the
argument that the less that the government
gets in the way the more that the economy can actually thrive. The more that business can do well, the more competitive our country will be, in which case everyone will be better off, and so they're often associated
as being pro-business, but many conservatives would argue that by being pro-business it's actually helping more individuals. Now an idea that often gets associated with liberals is one
of Keynesian economics. Now John Maynard Keynes was an
early 20th-century economist who argued that a government
could use fiscal policy in order to stimulate the economy. So Keynes argued that during recessions the government
could even run deficits in order to stimulate the economy, that even deficits were
not bad, by lowering taxes, because lower taxes would put
more money in individuals' and business' pockets,
and increasing spending. So higher government spending. Higher government spending. Now although Keynes is most associated with a liberal ideology, especially because it was practiced during the depression
by FDR, some would argue that it might have come
out of the depression, it turns out that most mainstream liberals and conservatives do practice some form of Keynesian economics. Liberals tend to stress the
higher government spending. If we're in a recession, the
government should spend more to stimulate the economy to put
more money in folks' pockets so that there's more consumer spending, which could drive the economy. Conservatives try to
favor the lower taxes. You will see conservative
government officials say, "Hey, we want to lower taxes
to stimulate the economy." Fundamentally, that is a
Keynesian point of view. They're focusing on the
lower taxes angle of it. In either case, if you're spending is
higher than your taxes, both sides would run a deficit in order to stimulate the economy. Sometimes the conservatives are associated with the idea of supply-side economics, and this is the idea, this goes back to being
pro-business and even lower taxes, that, hey, if more people have
more money in their pockets, especially those who invest or those who are starting businesses
or businesses themselves, that they can then expand their capacity. They could go and hire more people and that this would be good for everyone. Now what about libertarians? Well, on economic policy,
you could view them as even more conservative
than conservatives. They would favor the
smallest possible government. Smallest smallest possible
possible government. Many libertarians would argue that the government should only be there to protect property rights,
to have a common self-defense, to have some basic public
safety, and outside of that, the government should get out of the way, and people would be best off, and many libertarians would even argue that the whole idea of
a Federal Reserve System that's actively controlling
monetary policy is a bad idea. So I'll leave you there. This gives you a big picture of how political ideology connects to folks' views on economics.