No Tide Change
The upcoming elections have promised, or threatened, a red wave and as has been noted in past posts, so what, what will change? The southern border may tighten up a bit and instead of a couple of million, it will be reduced to a few hundred thousand. Gas prices will eventually come back down, but inflation will be tough to manage without fiscal policy changes. Those changes are up to the Federal Reserve which has painted itself into the proverbial corner with little chance of escape. The Fed will blame Congress for spending like drunken sailors and it will be correct. But will it deter Congress from trying to spend its way out of recession?
I doubt it.
The Republicans will probably take over the house and may tip the Senate (my bet is they won’t, but they do have a chance) and will do its best to spend money to get the economy moving again. It won’t work this time and supply side economics was a farce when the balance sheet wasn’t a mess. Now, with massive debt, continuous deficit spending and programs design to protect those that refuse to work becoming more ubiquitous and acceptable, our fiscal state will continue to decay.
It can’t be stopped, it will be too painful.
Since stopping the spending spree is too horrifying to consider, the end result will be continued policy tweaking, an inevitable recession, an eroding dollar and the eventual retreat from the U.S. dollar being the world’s reserve currency. Having another currency take over this function is a significant loss.
Even if the Republicans can take the Senate (and the House), the Executive Branch will do little, if anything to help them. The Republicans, like the Democrats, are divided and would have difficulty deciding where to go to dinner. They may try to tighten the border and prohibit biological men from playing on women’s sports teams, but substantive policy changes will not be considered. This is made clear by listening to the campaign advertising for any of the candidates.
And not just in my State.
Each side is divided and has its own variety of factions. It matters little which side of the aisle is evaluated, both subdivide and have various “sword issues”. If this candidate doesn’t support this group or that policy, they should be hung, shot and put on public display. The policy changes necessary will inflict pain and the incoming candidates (on both sides of the aisle) will convince the citizenry they can fix all problems simply due to the letter next to their name. People will continue to fall for it until this country fails.
It is sad to watch it unfold.