Op-Ed: A midterm elections threat assessment — high and getting higher
As we enter the last week of early voting and the first week of midterm elections, let’s make a crystal-clear connection between the two: the upcoming November contests and any potential midterm impact on the economy.
The current federal legislation on both Social Security and Medicare expires at the end of the year. Those programs, the bedrock of America’s safety net, are of such critical importance to virtually everyone that this could have significant — perhaps devastating — consequences for the economy and the country’s overall well-being.
At the same time, the current crop of congressional Democrats faces potentially insurmountable obstacles in controlling the House of Representatives. The Republican-controlled Senate is the one exception; and, despite their majority in the Senate, they’re still vulnerable.
There are significant economic consequences of the outcome of the various contests on election day. We’ll examine them in a few moments.
The first is the potential impact of the election on the economy. If the economy grows at its current, robust, 2.1 percent rate, it would generate approximately $1.3 trillion in new tax revenue over the next ten years. But if it shrinks at its current 2.2 percent rate — the rate projected by the Congressional Budget Office — then we would lose $500 billion.
The economy is now in a very weak state, with the unemployment rate rising to over 9 percent. And if a downturn occurred, we could see the unemployment rate go even higher, even more precipitously, as the number of job seekers decreases and fewer workers enter the workforce.
The second economic consequence is the potential impact of the election on the stock market. And if the overall economic environment were so bleak, you’d think that the stock market would be tanking. But it isn’t.
At the moment, the Dow Jones average closes higher than it opened, and the S&P 500 is up more than 50% since March. And if President Trump is re-elected, the stock market, for reasons