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  1. Wealth
November 8, 2012

The US election ignored the real economic issues

By Spear's

The US election was remarkable for not generating a debate about any of the economic issues facing America or the world

The US election was remarkable for not generating a debate about any of the economic issues facing America or the world. It was just a Punch and Judy Show, between a Ghost and a Phantom, as both candidates tried to placate the wavering voters who would decide the outcome with platitudes and TV-attack ads, but not with substance.
Barack said he had killed off Osama, while Mitt’s offer of a ‘fairer tax system’, whatever that is, failed to kill off Obama. The incumbent seemed content just to cut bait, whereas Romney looked at least as though he wanted to go fishing.

Read more: What does Obama’s election mean for markets?

All the 11% of waverers were wondering about, however, was how big a cheque could be squeezed out of once-rich old Uncle Sam in the name of democracy, but for their own free benefit: the ‘Ask not what you can do for your country, but what your country can do for you’ syndrome, which has subjected the Silent Majority to the growing Tyranny of the Combined Minorities. As Mitt observed but failed to capitalise on, their endless demand is for other people’s money in exchange for their one little vote, but these votes do add up – that’s democracy for you.

Mitt complained about these non-taxpaying scroungers living on the coat-tails of democracy, but got his maths wrong when he thought they represented 47% of the electorate, that he was still hoping would somehow vote for him, while he tore up their cheques. Nevertheless, it is worth examining the issue of why he lost, and why the Republican Party, the GOP, found itself living a horror story.
Read more: Best US election campaign videos

These minorities do add up now in America, just as the former white majority is fast diminishing, and the GOP were seen as having no time for gay people (the anti-marriage equality issue), African-Americans (the anti-affirmative action and pro-voter ID laws issue), Hispanics and Asians (the immigration issue), women (the anti-choice abortion issue)…
Then along came Hurricane Sandy and blew the GOP’s big tent clean over, as a bipartisan President Obama, the first African-American president, was left kissing and embracing distraught women and crying babies for five whole days, all the way down to Exit 35 on the New Jersey ’Pike, and promising yet more billions to the next dispossessed minority.
BUT AS HAMLET said, ‘Meantime some necessary question of the play be then to be considered’. The serious and non-debated issues for the re-elected one include: the rising Federal Deficit – up from $438.0 billion in 2009 to $1.1 trillion now – and Total Federal Debt – up $3.0 trillion+ over Obama’s first term, the resulting $600.0 billion Fiscal Cliff coming to a screen near him and all of us on 1st January 2013, the level of taxation and government expenditure going forward, and the lack of Growth across America and the world economy, and the persistently high level of structural unemployment, particularly among the young, which is prevalent everywhere. The easy days of yore are no longer with us, but are long since gone with the wind.

Pictured above: Mitt Romney and Barack Obama during a presidential debate

During this global recession since 2008, there has been far too much attention paid to GDP, and not nearly enough between the split between the Private and Public Sectors behind the GDP number. Why is this split more important than the GDP headline number itself? Because (Romney’s) Private Sector is the wealth creator, whereas (Obama’s) Public Sector feeds off its back, and Mitt’s enemy – the scroungers, along with the bureaucrats who manage their affairs – feed in turn off the back of the Public Sector.

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So Obama, who doesn’t do economics but does do bureaucracy, has won a second term. The electorate, however, may still not have forgiven Dubya’s Republicans’ disastrous economic policies that led to Global Crunch in 2008. But never before has a second term had such a déjà vu feel about it before it’s even begun: a fractious Congress, more Bernanke QE-printed squillions, more Keynesian inefficient infrastructure spending, more French-style bureaucratic welfare state expansion and more Federal Debt, but continuing high unemployment and close-to-zero Growth. And Israel doing long-range bombing practise over an Iranian arms factory in the Sudan…

It’s a pity, as corporate America and its banks are stuffed full of cash ready to go, if only excessive government expenditure was heading back to the dog-kennel, where it belongs, and corporation tax at 35% – 12% percentage points or 50% higher than the UK next year – was being slashed to unleash all that money for investment and growth. It will be a pity if Americans realise after a few days that they have missed a chance for change, just as the French did after their recent elections, and wonder why they voted for more of the same old failing postures, when they could have had economic change from a proven Capitalist operator, who was used to making the numbers add up and work.

Read more from Stephen Hill

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