Home Breaking News What Does the Democratic Win Mean for Your Pocketbook?

What Does the Democratic Win Mean for Your Pocketbook?

by Paul-Martin Foss

The results are in, and Democrats have retaken the House of Representatives but Republicans have retained control of the Senate. The big question now is, what effect will this split Congress have on the lives of ordinary Americans? And of course, what will this mean for the financial health of American households?

The major effect of the electoral result is that we can kiss any possible tax cuts goodbye. Without a majority in the House, don’t expect the Trump administration to be able to make any headway on getting any sort of tax legislation passed. Since the House will likely begin ramping up investigations into Trump’s relationship with Russia, ethics investigations against his Cabinet, etc., substantive legislation may take a back seat. Hopefully the existing tax cut benefited you greatly, because you can forget about keeping any more of your hard-earned money as long as Democrats control the purse strings.

The 5% cuts to government agency budgets that Trump was looking for will likely go by the wayside too. While agencies can still come up with cuts, it’s unlikely that Democrats will pass appropriations legislation that enacts those cuts. And given how profligate the Senate often is when it comes to pork-barrel spending, expect government spending to go up and deficits to worsen.

That extends to healthcare as well, so expect the Democrats to try to ramp up spending on Medicare. And forget about anything that could reduce healthcare premiums, as that would require gutting many of Obamacare’s headline provisions. No tax cuts, more government spending, and higher healthcare premiums? Let’s hope Democratic voters connect the hit to their wallets with the votes they cast this week.

The big question, though, is who is going to own the economy. With a stock market crash and financial crisis on the horizon, it’s almost guaranteed that the economy will tank before the 2020 election. That will make it a centerpiece of that campaign. We all know that the crisis is the result of the Federal Reserve’s loose monetary policy in response to the last financial crisis, but the economic illiterates in the media and in politics don’t understand that. So who will take the blame?

Will Democrats be able to blame Trump, claiming that they weren’t in power long enough and didn’t have enough control to be responsible? Or will Trump use the post hoc ergo propter hoc argument that stock markets surged after his election and tanked after Democrats won to boost his changes in 2020? With such a partisan political atmosphere in this country, it could come down to independents in 2020 deciding which explanation sounds more reasonable, even if neither one of them is true.

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