Economy and the Election

The economy not only affects the American consumer but American politics as well. Since this year is, of course, an election year the economy plays a key role in the election process. Currently, the economy is at a very vulnerable and fragile state of which over half of expert economists fear a recession. A recession occurs when economic activity declines and as unemployment increases over a certain period of time. As a result of this anxiety concerning the feeble economy Bush, as the current President, must create policies and a relief plan in order to salvage the U.S. market. As Bush, his administrators, and economists plan to rescue the economy, the presidential candidates must work on their own plans and edit those of Bush to not only jump start the economy but to prove their leadership skills as well. The New York Times has even stated that “polls show Americans are now more concerned with the economy than the war in Iraq, a trend that is reflected in the presidential campaigns” (Stolberg and Herszenhorn).
As the primaries proceed the focus on the economy has intensified. Both Democratic presidential candidates, Hillary Rodham Clinton and Barack Obama, are trying to attract support from those who are struggling economically. Clinton disagrees with the way that Bush has been controlling fiscal policy and believes in aiding the people of the nation by focusing on tax breaks for the middle class. She also wants to decrease foreign trade because it takes the manufacturing jobs away from Americans. Obama commented that big corporations that have no protection for American workers is “bad for our economy, it’s bad for our country, and it will not happen when I’m president” (Border and Zeleny). Like Clinton, Obama focuses his attention towards the middle class but contrastingly realizes that cutting free trade will hurt, not help, the economy. The Republican candidate, John McCain, is a supporter of making Bush’s tax cuts permanent and is looking to pursue even more tax reductions to promote the growth of the economy. All three of these candidates are trying to the vote of the Americans and recently focusing on the economy and their positions have attracts society’s attention.
The economy has been challenged by the rising oil prices, home mortgage prices, health care, and unemployment. In order to raise the confidence of American citizens the Stimulus Plan was created. The answers to salvage and jump start the economy lie within this plan that originated in the House and was altered and then approved by the Senate. A stimulus package incorporates fiscal policy, spending and tax measures, in order to boost economic activity. Of course there are many variables within the stimulus plan like tax cuts and rebates that are debatable among the Democrats and Republicans. These two parties inevitably have different notions of approaching fiscal responsibility but the state of the economy has urged both parties to convene and agree on policy in a timely manner. Originally, Democrats favored to extend unemployment and food stamps as well as to primarily urge targeted relief to aid the middle-class who would suffer the most if the economy falls into a recession. While on the other hand, Republicans advocated for President Bush’s income tax-cuts to become permanent. Both parties agreed that there should be tax rebates but naturally for different individuals either provided for everyone or just to those who earn enough money initially. The final outcome of the Stimulus Plan is as follows, “The House voted on Tuesday (January 29) to approve a $146 billion fiscal stimulus package, hoping to seal a fast-paced deal with President Bush on tax rebates and business incentives intended to jolt the economy with new spending” (Herszenhorn). This plan will, in high hopes, help the economy on it’s way towards progressing once again.
Though the package was created in order to aid the economy for now, certain factors must be considered top priority so that the U.S. economy can grow over the long term. These factors include keeping taxes low, managing U.S. exports through trade agreements that focus on the welfare of American workers, and turning attention to the health care dilemma. The stimulus package and attention to the aforementioned aspects of society will expand the financial growth at a slower pace instead of heading towards the doomed recession.
















Works Cited
Broder, John M, and Jeff Zeleny. "Clinton and Obama Emphasize Economic Themes."
New York Times 18 Feb. 2008. 19 Feb. 2008 2008/02/18/us/politics/cnd-dems.html>.
Herszenhorn, David M. "House Approves Stimulus Plan." New York Times 30 Jan. 2008. 19 Feb. 2008 .
Stolberg, Sheryl Gay, and David M Herszenhorn. "Bush Admits Economy Faces Challenges." New York Times 8 Jan. 2008. 19 Feb. 2008 com/2008/01/08/business/08bush.html?scp=1&sq=bush+admits+economy+faces +challenges&st=nyt>.

Assuming the Worst

Economic Downturn

In recent months there has been talk of an economic recession amidst reports of rising prices of crude oil and gasoline, the soar of food prices, falling home values, the decline of the dollar, and other sectors of the financial market. Despite all of these reports and showings, there is still hope to survive this economic downturn.
Many consumers and analysts are worried about preparing for the coming recession, when they should be trying to prevent it. Economist Chris Farrel believes that analysts and consumers alike are talking the economy into a recession. He reports:
“There's no doubt the discussion about the economy has taken a dark turn lately… Nevertheless, a good number of economists still believe the glass remains half full. The federal government's fiscal stimulus is coming. The Federal Reserve Board is aggressively easing interest rates. Exports are flourishing. The agricultural sector is booming. Inventories are well-contained. While the 7% of inflation-adjusted gross domestic product made up by housing and autos declined by nearly 12% over the past year, the segments of the economy that make up the remaining 93% of real gross domestic product rose at a healthy 3.8%.”

There has been only negative news. James W. Paulson, chief investment officer at Wells Capital Management said, “Sensitivity to signs of economic weakness have been magnified while evidence to the contrary is often ignored.” Of course, there are good reasons for economic pessimism today. Prices in the residential housing market are down sharply and foreclosures are skyrocketing. The job market is deteriorating, and the stock market is dropping steadily. Oil prices are at all-time highs and gas is going up with it. Each of these trends affects real people: The homeowner that signed a toxic mortgage now watching the bank foreclose on the house, a worker getting laid off because of Chinese competition, a family forced into credit problems to pay the ridiculous gasoline, heating oil, and food bill. Despite all this economic hardship, we all have to look for solution to solving these problems.
Analyst and column writer for Business Week, Ben Steverman, wrote five helpful tip for whatever 2008 will bring: don't get rattled by the uncertainty, if you trade stocks, be careful how you do it, diversify, and go international, Defensive moves might help you relax, but they'll probably hurt your returns, and make sure you have enough cash. If tips like these were followed by consumers and all stock-traders, instead of forcing themselves into paranoia, we will be able to come out of this economic downturn with less scars than we have to.
Even professionals who are convinced that we are inevitably end up in a recession or already are in one are skeptical about how bad it will be. Jens Hatzius, senior economist at Golman Sachs, said, “The key question is the depth and length of the recession. I continue to think it will be relatively mild, much closer to the 1990-91 and 2001 downturns than the 1973-75 recession or the 1980-82 double dip.” If it is considered to be a “mild” recession then maybe it can be avoided all together. Henry Paulson, the U.S. Treasury Secretary, reported, “housing correction, high energy prices, and capital market turmoil have combined to weigh on near-term growth," and the American government "clearly needed to act" as it did in passing a $150 billion economic stimulus package last week. With all this prevention activity the economy should be set on a course to slow the downturn.
Economic downturn is inevitable and everyone should prepare for it. This is no reason, though, to not do what we can to keep ourselves financially stable, as well as, to help the economy. A recession is not inevitable and with other national markets flourishing, this is a prime opportunity for American investors to cash in on overseas markets. That prosperity could be then shared in our hurting economy and market as an investment to boost financial sectors. The economy will always bounce back, but how far of a plunge are we willing to take for it? We decide.