• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 28 mins The United States produced more crude oil than any nation, at any time.
  • 2 hours China deletes leaked stats showing plunging birth rate for 2023
  • 4 days Bad news for e-cars keeps coming
  • 4 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

What the Election Means for US Economic Policy

Let’s put the economic policies the voters chose under the microscope and see what we got. It is not a pretty picture. The bottom line is that my scenario of a lethargic 2-2.5% GDP growth rate continues for the foreseeable future. Here are the reasons why:

1) The party with the worst job creation record in a century is now in charge of job creation. There were 23 million jobs created from 1992-2000. There were only 1 million created during 2000-2008 when the population grew by 22 million.

2) The party that presided over the biggest increase in the deficit in history, from $5 trillion to $10 trillion during 2000-2008, is now charged with reducing the deficit.

3) Republican deregulation policies favor large multinationals that have been the most profitable, because they have been the most aggressive exporters of jobs. Small businesses that generate the most jobs don’t show up anywhere in this picture.

4) Without any further assistance from Washington, the states and municipalities are going to have to take an extra sharp hatchet to budgets for teachers, police and firemen, the most junior claims on local resources. The drag on the healthy parts of the economy increases.

5) Much of the campaign focused on cutting the deficit by reducing spending. Below, please find the six largest expenditures in the $3.5 trillion 2010 Federal budget:

$687 billion - Social Security
$655 billion – Defense
$564 billion – Unemployment and Welfare Payments
$448 billion – Medicare
$287 billion – Medicaid
$162 billion – Debt service

Notice, first of all, that you did not see these numbers anywhere during the campaign. They should have been posted at every ballot box along with a Sharpie marking pen. Looking at the list, I see three untouchable Republican sacred cows, social security, defense, and Medicare, taking up the bulk of the spending. Debt service is untouchable. That leaves unemployment and welfare payments and Medicaid as big fat targets.

But even if you completely end this spending, close the agencies involved, and sell off the buildings, as many conservatives have proposed, you have only cut spending by $851 billion, or 61% of the current budget deficit. Some $549 billion of deficit remains. And this assumes the tax rates remain the same. Cut taxes, and the Medicare, unemployment, welfare-free budget deficit rockets to $1.2 trillion, while at the same time slowing GDP growth substantially further. Did I mention that falling spending causes job losses? Talk about jumping out of the frying pan and into the fire.

The most closely guarded secret of this election is what spending the Republicans cut in their first budget. I am waiting with baited breath to see how they do this.


By. Mad Hedge Fund Trader

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Anonymous on November 06 2010 said:
    Pretty sad. Pretty sad indeed. And let another Democrat put in his two cents. Obama has evidently forgotten why he was elected. But there is a solution: send him back to the South Side of Chicago and find another Democratic presidental candidate for the next election.
  • Anonymous on November 06 2010 said:
    What is the $ number you get when you combine the over-paid politicians salaries. Plus all the only as a politician's, work only a very few years (5 yr) and get paid a super retirement. Plus all the benifits no one ever mentions to the plubic. Air fares, travel allowances, hotels and wine & dine and every thing they manage to trade under the table. Just how much do politicians pay Into Social Secutity? The expense of all the drag alone Czars, Aids, hair cut & shoe shine boys. How much of all this money could be eleminated?
  • Anonymous on November 06 2010 said:
    It's a sad state of affairs. People used to run to make a difference - to do some good. They would do their term and then go back to their normal way of life. Now it's a business, a career - it's not about what you can do for people - but what you can do to stay in office - very sad.
  • Anonymous on November 06 2010 said:
    The unfunded mandates are piling up into the tens of trillions. No one is seriously considering making good on all of them. It is just a question of holding up the house of cards as long as they can while stripping the body politic for as much as possible.The tenured class is willing to go along for the ride to the end. People in the private sector who are falling off the edge every day are beginning to grow alarmed. Hence the very young and excitable Tea Party movement, which isn't going to go away or start shrinking anytime soon.
  • Anonymous on November 08 2010 said:
    I am afraid the 'bagger" movement was doomed from the start. They were disgruntled white(most over the age of 50) far right Republicans who were ticked at the Republican party far moving to far left(get that kind of screwed up thought process) From the beginning the were infiltrated by Republican operatives(Dick Armey and Freedom Works, Steve Forbes advertises for them and Palin says they exist to strengthen the Republican party. As they moved more to the right they lost Independents like myself.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News