If the economic news is blowing your mind, rest easy. We’re electing a new president and one candidate’s main focus is the economy. It’s the election, stupid.
If you didn’t catch Uri Dadush, director of the Economic Dept. of the World Bank this morning on CSPAN, go watch the video right now. Advance it to around 24 minutes and listen—Dadush said a best case scenario for the US economy is a “relatively mild slowdown.” Dadush also noted the stock market is a balance between “greed and fear.” Right now, courtesy of 24/7 news cycles and media’s love affair with a charismatic Democratic candidate, all you’re hearing about is fear. Dadush backed his statement up with facts.
Right now he said if you compare the debt of the US government relative to the size of the US economy and that of other countries, the US is not in “too bad a shape.” Dadush used the examples of Great Britain and Japan. Links to the video and to other related stories are in 'References' below.
Right now, Dadush said US debt compared to the economy is 65 percent of GDP. Japan’s is 170 percent. And the real statistical whopper to get your perspective going is the United Kingdom. “I am reminded that the UK emerged from World War II with a government debt of 450 percent of the GDP,” Dadush said. Such challenges can have a silver lining. The Swedish bailout was actually profitable to that country in the end. He said the US savings and loan bailout ended up being profitable to the US taxpayer. Currently, Dadush said, “The US does have room to deal fiscally with the problem.”
As usual, US media is missing a boatload of information that may benefit US taxpayers. For one thing, you can refinance your home right now for remarkably low interest rates. You can get low interest rates on a car loan. The price of gasoline is down. Smart people will limit their indebtedness, refrain from whimsical spending and hope the Democrats aren’t able to pass a tax increase that will slow the economy down as it always has. Frankly, I believe a Democrat never met a tax he or she didn’t like.
Remember the alleged rice shortage that caused panic in April? Of course you don’t because you’re bombarded with information. Where’d that shortage go? Can you get rice? Of course you can.
If you’re close to retirement, diversify your portfolio. If you’re young, look around for stocks that are recession proof—think necessities. I’m not an expert but these are strategies that have worked for us personally.
Right now it benefits the Democratic Party to push a negative narrative about the economy. Here’s a headline that should give you perspective. As the 2004 election neared, The Washington Post ran a story with the header, “As Debate Nears, Kerry Focuses on Economy.”
The Democratic Party abandoned an experienced female candidate for a candidate who is an unknown quantity. The economy takes the focus off possible negative narratives about that candidate. Also bear in mind the enormous financial power certain Democratic supporters are able to wield. What did this whole scenario begin with? The meltdown of Fannie and Freddie and then a letter from a Democratic senator to IndyMac; that letter was leaked to media, causing a run on the bank.
So while the economy is front and center, courtesy of the Fannie Mae and Freddie Mac meltdown which was not the first for the GSEs, remember one thing. It's not about the economy. It’s the election, stupid.