Democratic election victory under Biden positive for US economy

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The US elections are getting closer and closer. Even if the outcome remains uncertain, polls suggest that Trump challenger Joe Biden is ahead in the race for the office of the most powerful man in the world. According to experts, a Democratic victory should ultimately have a positive impact on the US economy.

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?? Turn around for US Democrats

?? According to surveys, Biden has the edge

?? The advantages of a “blue wave” are likely to outweigh this

The incumbent US President, Donald Trump, is considered a very business-friendly politician, which is why the market was already speculating at the time of the primary elections this year whether the victory of another candidate in the US election in November might have a detrimental effect on the US economy could affect. What few people on Wall Street expected at the beginning of the year: that there could be a turnaround for the Democrats, because this way of thinking has changed noticeably in the meantime.

Goldman SachsChief economist Jan Hatzius points in a note to recent polls suggesting that Trump’s challenger Joe Biden has built a clear head start on the incumbent president, while the Democrats are in a strong position to retake the US Senate.

Democratic “blue wave”

A possible election victory for Joe Biden and “a democratic ‘blue wave’ in which the party controls both the White House and Congress,” are more likely, according to the Goldman Sachs economist. This is likely to put the US economy under pressure – for example, corporate taxes could be increased under the control of the Democrats – but the benefits of an aid package against the economic consequences of the corona pandemic, which is expected to come soon at the inauguration, are likely of the President will arrive on January 20th.

“If all else is equal, such a blue wave would likely lead us to revise our forecasts. The reason is that the likelihood of a fiscal stimulus package of at least $ 2 trillion soon after the president’s inauguration on Jan. 20 would increase sharply, followed by longer-term increases in spending on infrastructure, climate, health care and education, which should at least coincide with the likely longer-term tax increases for companies and people with higher incomes, “ quoted the expert as saying.

Overall positive effects

According to Hatzius, the election victory of the Democrats under Joe Biden is likely to have “mixed” effects on the US stock markets, but overall it should have positive consequences, such as a “much simpler US fiscal policy, a reduced risk of renewed trade escalation and firmer global growth prospects”, accompanied. In particular, cyclical sectors and companies that pay most of their taxes outside the US should benefit from this development in his opinion.

Goldman Sachs is not alone with a positive outlook

Goldman Sachs is not alone in his view. As reported by CNN, one has Moody’s Analytics found that Biden’s economic ventures, if effective, would create 7.4 million more jobs than Trump’s. The economic outlook is strongest in the scenario where Biden and the Democrats take over Congress and their economic agenda is fully adopted.

“We see a ‘blue wave’ as the most likely outcome of the election,” CNN quoted strategists as saying UBS from a message to Kunden.Redaktion


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