Another election has come and gone. Republicans gained a lot of seats and will soon have a majority in the Senate. So what does this mean for you? It means absolutely nothing.
This election really was a repudiation of Obama and all of the Democrats who have followed him. These were generally not votes in favor of Republicans. They were votes against Democrats.
I think the big difference maker was Obamacare. It is completely tied to the Democrats. Most legislation has more subtle negative consequences that happen years down the line. Most legislation will avoid the blame because it is so far in the past or the negative consequences are hard to tie to one thing in particular.
This wasn’t so with Obamacare. The so-called Affordable Care Act has been anything but affordable. This is right around the time that employers are having their employees enroll for next year’s benefits. Employees see how much their health insurance premiums are rising. The election couldn’t come at a worse time for Democrats.
Obamacare is not completely at fault for the dramatically rising premiums. It is certainly partially responsible. But it is getting most of the blame. Therefore, swing voters came out against the Democrats.
This will have very little effect in the next two years. We already have gridlock and this will be more of it. We have a lame duck president who has relatively low ratings right now. He wasn’t going to get anything major done anyway, regardless of who controlled the Senate. We can expect the status quo for the next two years, assuming there are no new major wars. It will be big government and bureaucracy as normal, but we won’t see any new big initiatives. We won’t see any big increases in spending. Of course, we won’t see any decreases either.
I am a little fearful for 2016. The two main contenders may consist of a Republican against Hillary Clinton. Anyone who cares about liberty knows that Hillary Clinton is a complete disaster in every way. But I also fear if there is a Republican president and a majority in both houses of Congress. It may mean more war. It may mean more big government programs, just as we saw early on in the Bush years.
We typically see the smallest increases in government spending when there is a Republican-controlled Congress and a Democrat president. This was true of Clinton and it is true now with Obama.
In terms of your investments, this election changes nothing, at least for the next two years. The Federal Reserve, the NSA, and the CIA all have more control over your life than Congress.
The Fed is going to dictate the economy and your investments for the foreseeable future. The Fed is on hold with its monetary inflation, but I doubt this will last if and when we see stocks tumble or we see GDP shrink.
I am preparing for a possible recession, followed by another round of massive money creation by the Fed. Who knows what the next round of quantitative easing will bring?
For one final note, as a libertarian, I am encouraged by more states somewhat legalizing marijuana. We have taken great steps forward in the last few years and I hope it continues. It gives me great hope that more Americans are discovering liberty as an answer.