Sep 24 2008
Rambler" title="Profile Image of 
Rambler" />Rambler
US Economy - Election too close to call
If this is your first visit, please consider subscribing to my RSS feed. That way you'll be sure not to miss a thing!
Election Theme Yet Again:Â “It’s the economy, stupid.”
Americans are desperate for economic leadership.
Both candidates are relying heavily on promised tax cuts to fix the economy’s major problems. No surprises here, however…both have fallen back on their traditional party instincts.
McCain promises to keep tax rates low for all and to reduce corporate tax. This is a traditional Republican recipe for jump starting a suffering economy and creating jobs.
Obama is proposing tax cuts for the many that will target help on the middle classes. He will eliminate tax cuts for the very wealthy and reserve them for those that need it badly.
The Federal budget deficit, already at $400 billion, will absolutely grow in the new fiscal year.
Spending on healthcare, energy security, and alternative power all may be in danger if the candidates are serious about their promise to balance the books. The market’s lackluster response to the latest economic boost shows that whoever wins in November will face a long struggle to get America strong again.
It is not clear whether the result of the upcoming election will have an impact on either the economy or prospects for investors. Basically, the most powerful man in the world is less influential than one might think.
The actions taken by the Federal Reserve have had a much bigger influence on the US economy than the President’s tax relief package.
As for the markets, a research firm has released statistics showing that the Dow Jones average has risen an average of 7.2% a year under Democratic presidents compared with just 3.6% a year under Republicans.
Let’s not forget the important of the balance of power between Congress and the White House. When Democrats have controlled Congress (predicted to occur this year) the post-election year has been good for investors under a Democrat President (+12% on average) but poorer under a Republican (-1% on average).
History shows that a positive stock market performance between August and October of an election year precedes the re-election of the incumbent party about 80% of the time. A weak stock market has a similar ability to predict a change in party.
No one has said this won’t be interesting!
| 3.6 (1 person) |
