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Home » Online Forex Trading Blog » Politics and Money Dominate Historic Week

Politics and Money Dominate Historic Week

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US Politics, The Fiscal Cliff and Euro Debt

In a week that will not be soon forgotten, the United States will elect its President for the next four years. Voters will also fill Senate seats for the next six years and fill House seats for the next two years. The 2012 elections will not only shape the US but also shape  the globe. Regardless who the next President of the US is, the need for a functional Congress may be off greater import.

Last year, Congress achieved the dubious distinction of officially achieving a 10 percent job satisfaction report from US citizens. Even more than the Presidential race, it is the composition and mindset of Congress that will determine how the US and the global economy trends in the next two years. After the past two years, most Americans would just as soon throw out the entire Congress and start anew. If the same gridlock exists after the election, the US and the world could soon be in an insurmountable fiscal position.

Speculation is that there is not the political will in Washington to seriously address the impending Fiscal Cliff, that convergence of events on December 31st that will see the Bush Tax Cuts expire, the payroll tax reduction expire and a series of heavy budget cuts paralyze the US and the globe biggest consumer. If no action is taken, the US will lose about 6,000,000 jobs early next year.

Of equal importance is that the US credit rating will be lowered and the nation’s debt will not adequately be addressed. The country’s top CEOs have united in a call for a significant and far-reaching deficit reduction initiative along the lines of the $4.6 trillion Simpson Bowles Deficit Reduction Plan. If the Democrats do not give on reforms to social programs and the Republicans do not get away from the Norquist Pledge, which Romney signed and which his Vice Presidential running mate endorses wholeheartedly, the best outcome will be a short-term fix to the Fiscal Cliff.

Whether Americans realize it or not, such an outcome is not acceptable. The deficit and budget need to be addressed with serious people with serious, non-partisan solutions. The country must be prepared to pay the price for two unfunded wars, a crisis on Wall Street, two poorly administered governments and the worst Congress in US history.

Americans have been swamped with more than $2 billion of marketing spent by just the Presidential candidates, not to speak of untold billions spent on local and Congressional races. The US is sick and the doctor is out to lunch.

The Presidential election is billed as a battle between a financial wizard (Romney) and the champion of the middle class (Obama). Romney has changed positions so many times during the course of the campaign that nobody really knows his intentions, except that he has signed the Norquist Pledge which he will need to disavow if the country is to move forward. Obama has been battered for four years of a struggling economy that has been further hampered by Congressional Republicans that cast the interests of constituents aside in favor of opposing the President at every turn.

The campaign has been exhausting for candidates and the American public. A lackluster turnout at the polls will favor Romney. In all likelihood, Republicans will remain the majority in the House and Democrats will hold a narrow edge in the Senate. Unfortunately, the US may have reached a point where one party must control the three wings of government to get anything done. Half the country will be disappointed by the outcome of the Presidential election.

The G20

This has been a contentious and frustrated G20 summit this weekend in Mexico City. The world is losing patience with both the euro zone debt crisis and the US Fiscal Cliff. If there is one thing that all G20 nations agree with, it is that the time for action has come and gone. Both the euro zone and the US have acted irresponsibly in addressing their debt. The December 31st cliff is the immediate concern but new requests by Greece and a fragile Spanish economy and others could lead to the dissolution of the euro zone.

The US Congress will soon have to add more debt. Euro zone finance ministers are in gridlock, much like the US with Germany steering the region its way while weaker economies resist. The gridlock in the US and in Europe have unmistakable similarities; the chief one being that politics prevent progress. This is a critical week across the globe. The results of this election will either take the US consumer out of the game or add hope to a world that needs a strong US economy.

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About the Author -

Hiland is a professional writer with extensive entrepreneurial experience. He is a graduate of St. George’s School Newport, RI and the State University of New York at Albany where he majored in history. He has been active in the real estate business for 30 years and has founded and sold several businesses. Hiland currently writes for several financial sites and is a published author of the novel The Last Parade. He has recently completed a manuscript for a children’s book entitled Sami and The Minnow Man.

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