Republican Policies
- Right-wing - an ideology that belives in individual responsibility and limited intervention
- Left-wing - an ideology that belives in social equality and justice
What is a Republican?
- Right-wing political party
- Believes in competition
- Usually appeal to middle and upper classes
Isolationism
- An American policy that promoted the desire to keep out of foreign affairs
How does this help with the economic boom?
- Kept all the money to themselves
- Did not have to give to other countries/organisations, e.g., League of Nations (UN today)
- Many goods were produced in America rather than importing goods from elsewhere
Tax Policy
- In the 1920s, Republicans taxed individuals and businesses as little as possible
- Cut taxes for the rich, for people who would earn over $1 million, tax went from 73% -> 24%
How does this help with the economic boom?
- People kept more of their own money
- Spent on more goods therefore helping American businesses/industry
Laissez-faire
- Left business men alone, allowing them to do their own thing
How does this help with the economic boom?
- Business men like Henry Ford could:
- Come up with their own products
- Set staff conditions
- Do whatever to make America money without burdens of taxes, rules or regulations
Tariffs
- Taxes placed on foreigns goods to make them more expensive ($4 cloth made in Britain would cost $5 in America with 25% tariff)
- Republicans introduced several tariffs such as:
- Emergency Tariff May 1921
- Increased tax duty on imports by an average of 40%, some increased to 400%
- Fordney-McCumber Tariff 1922
- Tariffs on imported goods were now the highest than it ever was
Downsides
- As there are no foreign competition, some American industries and business did not improve their goods, services or production
- In retaliation, countries imposed high tariffs on America
- These increased tariffs damaged the global economy
- High prices and taxes meant life remained difficult for people in poverty