How Could the Midterm Election Results Affect You?

results of the midterm elections

Well, the results are in, or at least most of them anyway. And the much talked about and hoped for red wave didn’t materialize. For a lot of voters, that was a disappointment. And not only could it be politically disappointing, it could also be disappointing for your pocketbook.

Looking Forward to Gridlock

While control of the Senate will likely remain in Democrat hands, it’s the situation in the House that is possibly more concerning. Republicans didn’t get the clear overwhelming majority they wanted, with only a bare majority. Any illnesses or defections could derail anything they want to pass. Of course, without the Senate and a veto-proof majority, it’s highly unlikely that anything substantive would pass anyway.

We’re likely to see two years of intense gridlock, with a Republican-controlled House, a Democrat-controlled Senate, and a President who isn’t going to be able to pass any of his grandiose spending plans. On the one hand, that could be a good thing, as Biden’s plans could have added additional trillions of dollars to a national debt that already exceeds $31 trillion.

On the other hand, it means that Republicans won’t be able to rein in out of control spending either, as anything the House passes won’t go anywhere in the Senate. So the next two years might just end up being two more years of gridlock and stagnation, with nothing much being accomplished.

What we may end up seeing, therefore, is an economy that continues slouching into recession, with no one able or willing to do anything about it. About all that is certain is that the next two years will see a lot of political blame, with both Republicans and Democrats trying to blame the economy’s poor performance on the other party.

About the only silver lining to that is that most people will continue to associate the country’s poor economic performance with the Biden administration. So if the next two years end up being even worse than the last two, it might give enough voters the motivation to do something about it in 2024 and elect candidates who actually try to help.

But what will the economy look like in the meantime?

Stronger Economic Headwinds

Economic headwinds could continue to grow over the coming year as business activity slows, layoffs pick up, and recession nears. And because of Congress being in gridlock, there’s a good chance that nothing will get done in Washington that could in any way ameliorate the situation.

While the latest inflation numbers may have been slightly lower than in previous months, they’re still significantly elevated. And at the rate they’re decreasing, it could still be years before inflation is back down to the Federal Reserve’s preferred 2% annual target rate.

Even worse than the headline numbers are the food and energy figures, which are in double digits. Food inflation is at 10.9% year on year, while energy is at 17.6% year on year. Heading into winter, when natural gas and heating oil use will spike, that’s not very encouraging news, and means that millions of households may have to make hard choices this winter about whether to stay warm or stay fed.

The federal government hasn’t been helping things either, as continued government spending is driving up the national debt and driving up the cost to service that debt. With interest rates rising, the Congressional Budget Office expects just the interest on the national debt alone to reach $1.2 trillion by 2032.

And is the government doing anything to try to bring down either federal spending or the national debt? No.

We had the inaccurately named “Inflation Reduction Act” pass Congress earlier this year, but all it was was a repackaged and smaller version of President Biden’s Build Back Better plan. It added hundreds of billions of dollars of new federal spending, with promise of increased tax revenue to offset that spending, revenue that may never materialize.

Businesses have started to lay off employees as growth is slowing, and production both domestically and around the world seems to be dropping off as consumers find themselves completely tapped out. Freight shipments are dropping, stores are seeing inventory pile up, and everything seems to be pointing to a severe recession on the way.

With all of that going on, it’s utterly shocking that US voters not only didn’t send Democrats packing, but in some states actually gave them control over state legislatures and governorships. It’s as though they’re staring down the barrel of a gun and telling themselves that things are going to be just fine.

Surviving the Next Two Years

If you’re reading this, it’s probably because you’re one of the people in this country who realizes that everything isn’t fine. You see the writing on the wall, and you see the eerie parallels between what’s happening today and what happened in the early stages of the 2008 financial crisis.

And if you remember that crisis, you probably remember how much markets tanked and how much your investments lost. Odds are that you want to avoid repeating the same mistakes of 2008. Which is why you’re looking to protect your savings and investments with precious metals.

Gold and silver both performed admirably in the aftermath of the 2008 financial crisis, with gold nearly tripling in price and silver more than quintupling in price. And many people believe they’ll do the same during the next crisis. The only thing we’re waiting for is for that crisis to finally materialize.

There was a hope that a red wave might be able to bring about a change in policy that could forestall a crisis or at least offer a substantive policy response to a crisis that could help things. But with the red wave fading to a trickle, President Biden feels emboldened to keep trying to push his own agenda, the economy be damned.

Therefore we can’t expect anything to get better over the next two years, and it could very well get worse. If you’re looking to protect your savings and investments with gold and silver, now is the time to start thinking about it, before things get worse. Call Goldco today to learn more about how you can safeguard your savings with precious metals.

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