How the U.S. Economy Will Change After Election Day

From Birch Gold Group

We’re only a few days away from electing the next President of the United States, and the race is getting more intense. Trump and Hillary may not align on many issues, but one thing they can agree on is that the economy is one of the most important matters facing our country today. However, their approaches to cultivating a healthy economy are wildly different.

So what can you expect to change in the U.S. economy depending on who ends up in the White House? Let’s take a closer look.

If Trump Wins…

Pros:

1. Big Tax Breaks
   Trump’s tax plan includes breaks for practically all types of earners. Those cuts would likely be helpful for overall economic stimulation and support of the middle class, especially since the plan favors individuals and families from the middle class and up, according to the Washington Post.
2. Less Gridlock
   With Republicans already controlling Congress, and a decent chance that they’ll hold their ground in the down-ballot Senate races, Trump would be entering the White House amidst a relatively favorable climate for his party. That means the better parts of his economic policy plan would have a greater chance of surviving the Federal Legislature and being implemented.
3. Investment in Military Infrastructure
   When the Federal Government spends its dollars on the military industrial complex, it has a whole host of benefits, such as job creation, technological advancement, and overall economic stimulation. A key part of Trump’s platform involves a hefty increase in military spending, and whether you agree with the U.S.’s military engagements around the world or not, the economic benefits of such spending are difficult to ignore.

Cons:

1. Inhibited Foreign Trade
   Trump’s stance on foreign trade relationships is more than just rough around the edges; his intentions to alter the North American Free Trade Agreement (NAFTA) and impose additional tariffs on goods from China and Mexico could mean higher prices and lower selection for American consumers.
2. Increase of Federal Debt
   Trump’s approach to federal tax rates is a double-edged sword. On the one hand, it could empower Americans by letting them keep more of their paychecks. But on the other, it could increase the national debt by up to $10 trillion.
3. Recession Risk
   According to the Wall Street Journal, a study carried out by the Peterson Institute shows that Trump’s economic policies could put the U.S. at a far greater risk of a recession. His trade plan, in particular, could be particularly problematic, costing the U.S. economy up to 5 million jobs.

If Hillary Wins…

Pros:

1. Wall Street Expects Her
   The financial sector has been watching this presidential race very closely, and it appears to be favoring a Hillary presidency. In fact, the Daily Caller reports that market makers are betting “big time” on a Clinton win. We all have mixed feelings about the members of Wall Street, but it could reduce economic risk if they feel safe and secure after election day.
2. Historic Data Shows Economy May Favor Democrats
   Forbes reports why another Democrat in the White House could benefit our economy:

If history is a guide, a Clinton presidency would be better for the stock market, says Stephanie T. Withers, a senior vice president of Bel Air Investment Advisors with more than $6 billion under management.

“Consider the evidence. The average annual return of the Dow Jones Industrial Average Index (DIA) from 1901 through September 2016 has been 4.5%,” Withers said in an email. “Under Democrat presidents, the index has returned 7.0% on average, while Republican administrations have seen 3.0%.”

Cons:

1. Crippling Gridlock
   Assuming down-ballot senatorial races play out the way most political analysts predict, Hillary would face extreme opposition during her time as president. That does have the side-benefit of slowing down her less economy-friendly policies, but it could mean slower progress overall too.
2. Painfully High Tax Hikes
   This probably doesn’t come as a big surprise, but Hillary’s tax plan isn’t shy about reaching into American’s pocketbooks. Time magazine reports that her plan would include roughly $1 trillion in new taxes.
3. Trouble for Energy and Corporate Sectors
   Hillary’s views on oil, gas, and coal could be problematic for economic growth during her presidency. Granted, opposition in the Federal Legislature could hinder her from taking her anti-energy policies too far, but it’s something to keep in mind.

Never Forget This Golden Rule of Wealth Preservation

Regardless of who wins on Tuesday, there’s one rule you should know: sound savings and investing principles remain the same no matter who’s in power. That said, one of the most important of those fundamental, unchanging principles is to hold a portion of your wealth in a physical asset with tangible value. And for that reason, no matter the outcome on Election Day, we already know one thing: Gold will prevail.