Pollsters, mainstream analysts, and political pundits all appear to be increasingly confident in their predictions that Joe Biden will be the next President of the United States. Having learned the lessons of 2016 when it comes to forecasts, we will not make the mistake of ruling out another Trump surprise. But it is certainly worth considering the implications of a “so very certain” Biden presidency.
Sites like Politico, FiveThirtyEight and Real Clear Politics all believe that Joe Biden will be the next United States president. Betting platforms, such as PredictIt or Betfair, also seem fairly certain of a Biden victory.
Nevertheless, the race might actually be tighter than projected. For one, it is important to note that Betfair gives Biden a 61% chance of winning, while around this time in August, four years ago, betting sites were giving Hillary Clinton a 90% chance of victory.
Trump trailing, but the race is just starting
As we write this blog post, Mr. Trump lags behind the Democratic nominee by 9 percentage points—as he did at this point in the last presidential election. The president’s share of support, now at 41%, hasn’t topped his opponent’s 44% this year. Mr. Trump also trails the former vice president in aggregated polling of most battleground states, though his deficit is smaller than in national polls.
However, surveys also identify potential strengths in his political standing, some of them not widely noted, that could help him close the gap by Election Day. His public image has also improved some. More voters saw Mr. Trump in a negative light rather than a positive one in the most recent polls, by a margin of about 12 percentage points. But at this time four years ago, negative views outnumbered positive ones by 33 percentage points.
Also, according to recent polls, interest in the election has risen among Republicans in the past month and now matches Democratic interest. Some 85% of Republicans rate themselves as highly interested in the election, compared with 83% of Democrats. The conventions have the potential to raise that interest further.
The New Green Deal
Nevertheless, let’s assume Joe Biden wins the election and the presidency. What will the implications be?
Well, economically, Mr. Biden is not making a secret of his program. On the Biden-Harris Campaign website, “THE BIDEN PLAN TO BUILD A MODERN, SUSTAINABLE INFRASTRUCTURE AND AN EQUITABLE CLEAN ENERGY FUTURE” starts with the following paragraph:
“At this moment of profound crisis, we have the opportunity to build a more resilient, sustainable economy – one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050. Joe Biden will seize that opportunity and, in the process, create millions of good-paying jobs that provide workers with the choice to join a union and bargain collectively with their employers.”
Clearly, Mr. Biden has subscribed fully to the Green New Deal, which refers to the original “New Deal”, a set of social and economic reforms and public works projects undertaken by President Franklin D. Roosevelt in response to the Great Depression.
The Green New Deal supposedly combines Roosevelt's economic approach with progressive ideas such as renewable energy and resource efficiency. But despite what its architects and promoters advertise, it goes well beyond that too. As published in various US newspapers, including the Washington Post on February 11, 2019, the Green New Deal resolution calls for a “10-year national mobilization” whose primary goals are as follows:
“Guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States."
"Providing all people of the United States with – (i) high-quality health care; (ii) affordable, safe, and adequate housing; (iii) economic security; and (iv) access to clean water, clean air, healthy and affordable food, and nature."
"Providing resources, training, and high-quality education, including higher education, to all people of the United States."
"Meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources."
"Repairing and upgrading the infrastructure in the United States, including… by eliminating pollution and greenhouse gas emissions as much as technologically feasible."
"Building or upgrading to energy-efficient, distributed, and ‘smart’ power grids, and working to ensure affordable access to electricity."
"Upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification."
"Overhauling transportation systems in the United States to eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in – (i) zero-emission vehicle infrastructure and manufacturing; (ii) clean, affordable, and accessible public transportation; and (iii) high-speed rail."
"Spurring massive growth in clean manufacturing in the United States and removing pollution and greenhouse gas emissions from manufacturing and industry as much as is technologically feasible."
"Working collaboratively with farmers and ranchers in the United States to eliminate pollution and greenhouse gas emissions from the agricultural sector as much as is technologically feasible."
Excessive debt – and the implications for wealth management
No matter what you think of the Green New Deal, one thing is clear: It will cost A LOT!
Therefore, even though US deficit spending and debt are at record highs already, you can rest assured that it will rise further under Biden’s presidency. That said, President Trump is a big believer in government stimulus spending too. However, his approach to stimulate the US economy is a very different one. Additionally, under Biden, taxes will likely be considerably higher than under President Trump, and you may also expect new kinds of taxation.
“I can scarcely contemplate a greater calamity that could befall this country, than be loaded with a debt exceeding their ability ever to discharge. If this be a just remark, it is unwise and improvident to vest in the general government a power to borrow at discretion, without any limitation or restriction.” ~ Brutus
Ultimately, under both scenarios, we expect more debt. And, as will be discussed in depth soon, we consider excessive debt and the government measures that will come with it, to be the biggest threat to wealth and freedom in America today.
We are currently preparing a Special Report titled “On the Brink of a New Era – Are You Prepared?”. We will be publishing this report in the coming weeks. Here’s a short excerpt from the introduction, which tells you a bit about the implications we envision for wealth protection moving forward:
“As we stand on the brink of a new decade, we are entering a period of high uncertainty and considerable challenges – economically, politically, technologically, and socially."
“In view of the current economic crisis and under the assumed power to force an economic recovery with more “cheap money”, central banks and governments around the world have loosened their fiscal and monetary reins most spectacularly. The general consensus appears to be that this can continue indefinitely. We dare to disagree.
“We consider the past decades of excess and the immense level of public debt as the number one enemy to our freedom, wealth and prosperity as we move forward. The aftermath of it all will crystalize one thing: It is dangerous to tinker excessively with a complex system such as the economy and financial markets. The increasing interventionism of governments and central banks in a free-market system creates all kinds of moral hazards and imbalances. Well-intentioned policies “in the interest of all” are generally not in the long-term interest of anyone. At best, they may serve the temporary interests of some.
“With this report, we want to alert you to the fact that we are coming to the end of a secular business cycle with impressive global economic growth and even more impressive advances in asset prices, all largely fueled by a mix of globalization, continually declining interest rates, unprecedented central bank induced liquidity and credit, and with price inflation nowhere in sight. We are convinced that this economic model is running its course and we need to buckle up for a very different cycle up ahead. Most of all, we recognize two formidable risk factors that deserve thorough attention: debt and financial repression, combined with inflation that will ultimately be the main measure to reduce the formidable mountain of debt the world faces today.”