What is the Difference Between Hard Money and Soft Money?

The terms "hard money" and "soft money" have different meanings depending on the context in which they are used. In economics, hard money refers to coins or specie, while soft money refers to paper currency. However, the terms are more commonly used in politics to describe different types of political contributions.

In the context of political campaign funding:

• Hard money refers to direct contributions to specific political candidates running for public office. These contributions are regulated by law through the Federal Election Commission and are subject to limitations. Individuals, corporations, and labor unions can contribute hard money, but there are restrictions on the amounts they can give.
• Soft money refers to indirect contributions to political parties and political action committees (PACs) that are not regulated by election laws. Companies, unions, and individuals can give donations in any amount to a political party for the purpose of "party building" activities, as long as the donations are not used for specific political candidates or campaigns. Soft money can be used for general activities such as get-out-the-vote efforts or to pay administrative expenses, but it is not supposed to be used in federal elections.

In summary, the main differences between hard money and soft money in politics are:

1. Hard money is contributed directly to specific political candidates and is subject to regulation and limitations, while soft money is contributed indirectly to political parties and PACs and is not subject to the same regulations.
2. Hard money can be used for specific political campaigns, while soft money is intended for general party-building activities and cannot be used for federal elections.

Comparative Table: Hard Money vs Soft Money

The difference between hard money and soft money can be understood in various contexts, such as economics and politics. Here is a table summarizing the differences:

In summary, hard money is typically associated with tangible assets, short-term loans, and direct political contributions, while soft money is associated with intangible assets, long-term loans, and indirect political contributions.