The best news as 2008 dawns, of course, is that this most endless of presidential campaigns now finally reaches a point at which something actually happens. Finally the people will speak, starting Thursday in Iowa. So what will they say?

The races in both parties have developed along very unexpected lines, making this probably the most fascinating presidential election in decades. Let's start with the Republicans. Here we have the most unpopular sitting president since Richard Nixon. Significant majorities of his countrymen have long since concluded that they made a mistake in electing him; that he isn't up to the job; that he basically lied us into a war; that his domestic policies have been at best no great shakes; and that the conservative ideology to which he has been in thrall has not served the country well, to put it mildly.

And yet, by and large, the Republican candidates are running on exactly the same policies that Bush has pursued. Consider this list. All the major Republican candidates want to "stay the course" in Iraq, denouncing any discussion of withdrawal as evidence of pusillanimity. All see the fight against terrorism in more or less Bushian terms. All want to make the Bush tax cuts, now scheduled to sunset in 2010, permanent - even John McCain, who at the time voted against them. All have promised the leaders of the Christian right that they will appoint supreme court judges "in the mould of" Antonin Scalia and Clarence Thomas.

What this euphemistic language means is that whatever a candidate's previous positions on abortion and gay rights - Rudy Giuliani, for instance, has supported both - the leaders of the religious conservative movement have exacted commitments from all the Grand Old Party candidates to appoint the kind of judges they want, and that matters far more than past positions.

There's more. Healthcare is a priority in this election. But to hear these Republicans, you'd never know it. Their healthcare plans range from cynical to inadequate. Climate change? They barely acknowledge the problem and are particularly loath to acknowledge that human activity has contributed to it. They continue to insist, as Republicans since Ronald Reagan have, that the only real domestic enemy the American people face is the federal government, which they continue to want to starve.

It's pretty astonishing, really - we're at the tail end of a failed presidency, and the people running to succeed it are promising to continue its failed policies.

Now, many observers would say, well, they're just pandering to their party's rightwing base, and once one of them secures the nomination, he will tack to the centre. Undoubtedly, he will, for tactical reasons. But the real question is how the next Republican will govern should he happen to win. And the answer to that question is that there's every reason to assume that he will be just as a conservative as Bush for one simple reason: the interest groups that run the GOP will not brook much deviation from the standard line.

Those interest groups are three. The neocons run foreign policy - the Iraq disaster has not affected their influence in the GOP one whit. The theocons run social policy. And the radical anti-taxers run domestic policy. Until forces inside the GOP rise up to challenge these interests, any Republican administration will be roughly as conservative as Bush. The candidates have slightly different theories of stasis, they will tinker around this edge or that, but that's about all you can say.

On the Democratic side, there is far more divergence. Not so much on policy - they're all for universal or nearly universal healthcare, for getting out of Iraq, for doing more for unions, for bringing some equity and progressivity to our taxation system and so on. If you'd asked me a year ago what the major Democrats' positions on the leading issues would be, I would not have guessed that they'd be this uniformly liberal.

What they differ on is how they and the country will accomplish these things. The astute analyst and writer Mark Schmitt was the first to identify this phenomenon, naming the Democratic race the "theory of change" primary. John Edwards's theory of change is that the system is corrupt, spoiled by corporate greed, and so the way to get change is to wage a kind of class war against it. Barack Obama's theory of change is to ask independents and conservatives of good faith to work with him on encircling resistant forces and changing the system. Hillary Clinton's theory of change is that the system is failing Americans in certain particular respects and that it is best massaged by someone with years of experience working within it.

The Democratic caucus-goers of Iowa will tell us Thursday night which of these theories, retailed to them at close range for many months, they've embraced, although the outcome seems likely to be close, so the question won't yet be settled. Republican caucus-goers seem more likely to tell us that they like Mike Huckabee's version of stasis. But even that won't reveal much, because Iowa's GOP caucus-goers are heavily weighted toward religious conservatives like Huckabee.

Whichever theory of change Democratic voters nominate, and whichever theory of statis Republican voters select, the choice before Americans next November will be stark. In 2004, many Americans, particularly liberals fearful about a second Bush term, took to calling that election "the most important of my lifetime". And it was, for a while. Now this one is.

· Michael Tomasky is editor of Guardian America

michael.tomasky@theguardian.com