The M.A.G.A. Effect: How Will the US Economy be Affected by the New Congress?
The upcoming shift in the US Congress is expected to have significant implications for the economy. While some may hope for substantial changes, the reality is that the incoming M.A.G.A. people might not be able to significantly alter the current landscape in the short term.
Republican Performance and the Current Economy
Historically, Republican administrations have not delivered as much for the economy as Democratic ones dating back to before World War II. Despite their rhetoric, they often fail to translate their promises into practical changes. The current Republican leadership, including Senate Minority Leader Mitch McConnell, acknowledges this historical deficiency.
Some have drawn parallels between the incoming M.A.G.A. leadership and the British leadership during a period of economic decline, which was marked by significant political unrest and just six weeks in power before being voted out.
The current US economy is in good shape with expanding GDP, stable employment, record corporate profits, and decreasing deficits. However, recent events, such as the ongoing conflict in Ukraine and the resultant surge in inflation, particularly in fuel prices, pose challenges to maintaining this momentum.
Legislative Challenges Ahead
One key challenge for the M.A.G.A. people will be the potential push for legislation to reopen exploration and drilling for natural gas and oil. President Biden is likely to veto any such legislation, and Democrats are unlikely to rescind their veto. However, the pressure from investigations into President Biden’s personal business ties and those of his family members may force him to reconsider.
The border issue also remains contentious. The current administration is already under investigation, with the possibility of impeachment looming over Secretary of Homeland Security Alejandro Mayorkas. Whether the House and Senate will support a renegotiation of border agreements with Central American countries is uncertain, but a drawn-out process is expected.
Government Spending and Inflation
One of the key areas of focus for the new Congress will be reducing government spending, particularly through reallocating funds for increased IRS agent numbers. While this will likely face media criticism, the combination of continued high interest rates and reduced government spending could help lower inflation.
The most significant impact may come from the numerous investigations that the incoming M.A.G.A. Congress is expected to initiate. A comprehensive investigation into the Department of Justice (DOJ) and the FBI is likely, with any findings potentially influencing the next administration’s decisions. The outcome of such investigations may also shape long-term political and economic policies.
The Next Administration’s Position
Whatever changes are made during the M.A.G.A. tenure are likely to position the next administration for significant moves. The investigations and their outcomes will provide the future administration with the necessary tools to implement systemic changes.
As the economy faces ongoing challenges, it is crucial to maintain a balanced approach. While the short-term impact of the M.A.G.A. incoming Congress on the economy may be limited, the long-term political changes could influence economic policies for years to come.
In conclusion, while the M.A.G.A. people may be busy with investigations and legislative battles, their immediate impact on the economy remains uncertain. However, their actions could set the stage for significant changes in the political arena and, consequently, the economic landscape.