Impending Recession Supersedes Election Anxieties

Welcome, Mr. or Mrs. President. Here is Your Recession

The nation is completely obsessed with the candidates it being the election year, and trying to find the best person for the job. While the mud-flinging between the candidates gets worse the closer it gets to November; voters are seeking to find the best option for their future.

Voters are nervous for the future, and they should be. As experts look at the state of the economy, there is substantial agreement that a recession is inevitable. The importance of the election will be which president can most efficiently handle a downturn, instead of which candidate can avoid the recession.

Financial History

It would not be the first time that a United States president enters the job in the midst of a recession. In fact, both President Obama and President Bush entered the office with a declining economy.

President George W. Bush joined the office in 2001, just as the economy was beginning to decline after a surge in the 1990s. When President Obama came into office in 2009, he was thrust into the deepest downturn in the economy since the 1930s.

Causes of the Recession

As the candidates battle for their chance to run the country, and the threat of recession looms ever present in the minds and pocketbooks of the voters, it is important to see how the recession came into being. When looking for causes, many of them are international.

A series of unforeseeable and foreseeable problems will slow the United States economy, causing a recession. Japan’s continued and strengthened recession combined with a decline in the Chinese markets are causing a downturn in many of the world’s major economies. Coupled with this comes the looming threat that the United Kingdom may leave the European Union, throwing its strength into question.

While these international threats are significant factors in the recession, they are not the only threats. Voters are not the only ones watching with bated breath to see which candidate will win the Oval Office. Fears of the economic policies proposed by potential Republican nominee Donald Trump are starting to influence the policies of companies and consumers alike, trying to protect themselves, and damaging the economy in the process. Donald Trump is not the only fear in the economy, as uncertainties of democratic nominees Hillary Clinton and Bernie Sanders are active as well.

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Previous Economy Wreckers Seem Tame

In the past, there have been three major factors which wrecked the economy. In fact, these three factors were the primary cause of the recession which has plagued the United States since 2008.

These include the significant increase in interest rates by the banks, combined with a sharp and sudden surge in oil price, and the bursting of the housing market bubble. To keep these factors from playing a continued role in the decline of the economy, the Fed has made changes to the increase in interest rates, following a slower path, rather than the fast track that got the economy into trouble.

Vulnerability of Businesses

Another factor that needs consideration is the current state of firms in the economy. For various reasons, corporate profits have been dropping fairly consistently since the crash of the economy in 2008. In fact, the last quarter saw a dip that corporate profits have not seen since the 2008 collapse of the economy.

The decline of corporate profits is never a good sign in the economy and leads to further actions which can damage the economy. When corporations lose benefits, they make them up through cutbacks and a sharp decline in hiring rates and investment rates. This lack of money and employment has a snowball effect, worsening the economy’s downturn.

The corporate decline in profits is not a significant threat to the impending recession, according to experts. However, they do not help the future of the economy and for those looking for jobs. Profits in all areas of the corporate economy have been in decline, but nowhere are as deeply as they are in the energy industry.

As this trend continues, this drop in profits could be seen as the precursor to the sharper recession. As a result, inflation will increase, and the Fed will have no other choice but to raise interest rates at a faster and more aggressive rate to compensate.

Overall, Watch Out.

With all of the signs coming into alignment, no matter if Trump, Clinton, or Sanders wins the presidential election, the chances of seeing their financial abilities in action are adamant. They will need to find a way to live up to all of the promises that they made during all three of their campaigns to keep the voters happy, as well as protect the national against the three.