Obamanomics: How Will an Obama Presidency Affect Your Wealth?
With all eyes now focused on the Presidential election of 2008, the great question of the week came in: “Jay, who do you think will help the economy and stock market more: John McCain or Barack Obama?”
This is a loaded question. You want me to talk about politics? As many of you know, I am not shy when it comes to sharing my thoughts on three taboo subjects: faith, politics, and money. Today I will give you a bonus: ALL THREE!!!
Some believe the Republican strategy of “less government” and lower taxes favor the economy and markets. Many believe that we need to run from the Republican mess George W. Bush got us into. Others believe that Obama is the second coming of Christ. He can do no wrong in some people’s eyes. After all, he is the candidate of “change”. He sure can give a speech, but is there any substance? How will he handle one of the top concerns on everyone’s mind: THE ECONOMY?
Though I was an economics major in College and received my masters degree is financial planning, I do not claim to be an economic forecaster. However, I do sort through thousands of articles, news stories, and subscribe to numerous monthly newsletters scouring to find the best sources of information for my audience. I saw a great article this week from Dr. Mark Skousen. He has been the editor of Forecasts & Strategies since 1980 and is a nationally known expert on investments and the economy. He has written over 20 financial books and recently shared his economic opinion on what an Obama Presidency would look like:
What Obamanomics Will Mean for Investors
“Make no mistake: All other issues aside, when it comes to the economy Barack Obama is a throwback to big-government liberals like FDR, LBJ and Jimmy Carter.
His new spending proposals alone — on health care and “green” energy, for instance — would add an estimated $800 million to the federal budget.
As for the tax hikes to pay for all this, my friend Steve Moore of the Wall Street Journal calculates that the Obama tax plan adds up to a 39.6% personal income tax, a 52.2% combined income and payroll tax, a 28% capital-gains tax, a 39.6% dividends tax, and a 55% estate tax.
And remember: Obama and his fellow Democrats — who are likely to enjoy strengthened majorities in Congress come November — don’t have to do anything for these tax hikes to take effect. They simply have to allow the Bush tax cuts to expire on schedule, as they have promised to do.
My friends, you can’t have capitalism without capital. Yet, Obama wants to penalize capital, individual and corporate.
The bottom line? If he’s elected, Barack Obama would no doubt lead the nation toward the kind of socialism now operating in Western Europe — where production and growth can be charitably described as stagnant.
And that’s bad news for American business — and for most American stocks.”
Pretty interested perspective from an economist like Mark… For those who think Obama is the “new” savior for this struggling economy, think again! There’s only One savior who is in control. I have faith that we as a country will elect the right leader. I pray for our country’s direction and that we take back our country. Let us get back to the values of our forefathers – hope, love, and faith in God! Too many Christians sit on the sidelines and don’t get involved. Stand up for God’s values. Christian voters can make a difference!
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I truly want to help more of God’s people make wiser decisions with their money so they will have more to give. Many people ”give” to ”get”. I believe we should “get” in order to “give”. By having more financial resources, we will have a greater opportunity to spread God’s love.
3 Comments
Quote:
“My friends, you can’t have capitalism without capital.”
What’s interesting is if you turn the phrase “inside out” to read..
“you can’t have capital without capitalism.”
or more appropriately “you can’t have capital without CAUSING capitalism.” you then have the formula that will play out in the eventual evolution of China. It will most definitely take a long time, and it may not be pretty. just remember, You don’t want to see those tasty sausages made.
I saw this come out today! Pretty interesting stuff….
Campaign promises are very different from the reality of running a country. So, a certain amount of discounting need be applied. As we head toward the election season, I want to take a look at some of the influence a president can have on the economy and what an election may mean for the economy.
1.The president can have a large amount of influence over the economy. The U.S. economy is not a command economy. Economic cycles are long lived and have their roots in a combination of factors, including trade and demographics. But because of a series of interventionist laws, the president has broad powers to help extend expansions and accelerate the ending of recessions. The acts include the Budget and Accounting Act of 1921, the Reorganization Act of 1939, the Employment Act of 1946, and the War Powers Act.
2.Historically, we have seen the following market reactions in an election cycle:
•average market gain: 8.4%
•average gain if Republicans win: 10.6%
•average gain if Democrats win: 5.6%
•average gain if incumbent party wins: 13.9%
•average gain if incumbent party loses: 1.2%
3.Defense, health, and financial services industries could be favored by a Republican win.
4.Alternative energy, wind, water, and solar power industries could be favored by a Democratic win.
5.Along with increased globalization, greater world competition, and the shrinkage of the U.S. economy as a percentage of the world economy, the power of the president to influence the U.S. economy is lessened.
6.I expect we will see a return to greater regulation after the Bush years and the most recent economic and banking problems. The bottom line is that the financial system and amount of outstanding credit have become too important to ignore.
7.The three biggest issues that the next president – Democrat or Republican – will face are:
a.mounting federal and trade deficits
b.divergent interests of those who wish to protect U.S. jobs and those who seek greater trade freedoms
c.energy policy and maintenance of national infrastructure
Remember: Democrat or Republican, historically we have seen that election years are good for stock markets! As a citizen, by all means focus on the platforms, the speeches, and the excitement of the campaign. But as an investor, distance yourself from the rhetoric and hype. Remember that the long-term trends in company earnings, worker productivity, and competitiveness, as well as sensible diversification and common sense, all probably matter more to good returns than elections.
Hi there!
My first post at this great blog!