The Democratic Party is home to most Keynesian economists, with a smattering of Austrian economists.  The Republican Party is home to most Austrian economists, a few Keynesian economists, all Supply-side economists, all Monetarists, and most Libertarians.  It can be an unhappy alliance.

Austrian economists place great importance on balancing the budget EVERY year.  Keynesian economists believe it is okay to borrow money one year IF it is promptly paid back.  Supply-side economists embrace deficits in the short-run by increasing economic growth via tax cuts.  Monetarists believe the economy can be controlled by the Federal Reserve’s control over money supply and interest rates.

Libertarians are somewhat unique in that it is often difficult to separate their political philosophy from their economic philosophy, but it is fair to say they believe the Fed should be dismantled and that America should return to the gold standard.  (Of course, this drives the Monetarists crazy!)

I was amused watching Mitt Romney trying to get his arms around the big Republican tent of economists during the first debate.  He embraced the Austrian economists and the Supply-siders, without offending the Monetarists or Libertarians.  Tough job . . . Good job, Mitt!