In the upcoming US presidential elections, the US economy will once again be a decisive factor. It’s not only about Barack Obama vs. Mitt Romney, but also about two very distinct views on how to better the economic situation.
The US will soon elect yet again the mightiest man in the world. On November 6, 2012 voters decide whether Barack Obama stays in office or Mitt Romney, the former Massachusetts Governor and Bain Capital executive, moves into the White House.
As usual, the economy is a decisive element in the election and the two candidates advance rather distinct views on how to better the situation. While Obama plans to repeal tax cuts for households earning more than $250,000, which was introduced by the Bush administration, Romney wants to keep them going. Obama’s long term aim is to reduce spending costs and to raise taxes for wealthy households, and at the same time continue to invest in education and research to aid the economy heal itself. Romney, on the other hand, plans to encourage business by immediately cutting taxes and regulations and thereby freeing the private sector.
Why is the Economic Situation Relevant for the US Elections?
The economic situation will have a great impact on the outcome of the elections, since 2012 is the third year in a row of disappointingly slow economic growth, which shows that the 2008 financial crisis and subsequent recession had a worse long term effect than expected. In fact, the US finds itself in the slowest growing three-years-span outside of a recession or depression since 1930.
Also, the US economy is affected by the troubled euro zone, which could yet worsen, leading business owners to be cautious about making investments. Rising concerns about tax increases and spending cuts towards the end of the year add to the assumption that economic growth rates will stay low in 2012 and perhaps also in 2013. The fact that the US is highly indebted, faces comparatively high unemployment rates and that the gap between the rich and poor continues to grow adds to a feeling of discontent and signs of social unrest amongst Americans. One has to look no further than the Tea Party Movement or Occupy Wall Street for evidence. The voters’ discontent with Obama’s presidency became apparent in 2010’s Midterm elections and the Republicans hope to build on this success.
Although surveys suggest that Obama is currently in the lead in public opinion, he will have to explain the disappointing economic situation during his presidency and find a way to convince Americans that the last years were the beginning of a gradual economic stabilization in order to win the election. Like James Carville, the Bill Clinton strategist, used to say, “It’s the economy, stupid!”