U.S. Elections and the Outlook for the Global Economy
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Transcript of U.S. Elections and the Outlook for the Global Economy
U.S. Elections and the Outlook for the Global
Economy
Robert GenetskiWebsite: ClassicalPrinciples.com
312-565-0112
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
Outline
I. Economics: scarcity and povertyA. How to create growth and prosperity?
Outline
I. Economics: scarcity and poverty
B. Economic theories1. Keynesian framework2. Classical framework
1. Characteristics-- fundamental to our human nature-- universal: apply to all people in all countries-- timeless
Classical Economic Principles
2. Basis: When individuals have the most control over their own lives, they tend to make decisions not only in their own best interests, but in the best interests of others as well.
Classical Economic Principles
3. Classical Policies:
-- low tax rates & limited government -- free markets -- protection of property rights -- a stable currency
Classical Economic Principles
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
Measures of Economic Freedom 1. Size of government 2. Legal system & security of property rights 3. Sound money 4. Freedom to trade internationally 5. Regulation
Freedom & Economic Prosperity
Least Free Third Second Most Free$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Economic Freedom and Per Capita Income: 2010
Economic Freedom Quartile
Source: Fraser Institute, Economic Freedom of the World: 2012 Annual Report
Economic Freedom Quartile$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000Income of the Poorest 10%: 2010
Least Free Third second most free
Source: Fraser Institute, Economic Freedom of the World: 2012 Annual Report
Economics is not about statisticsIt’s about people
The most effective solution to promoting growth and prosperity is to spread economic
freedom throughout the world.
Freedom & Economic Prosperity
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20106.6
7.1
7.6
8.1
8.6
European Nation's Economic Freedom Scores
score (10 = most freedom)
United Kingdom
Germany
Italy
Greece
France
Spain
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20105.0
5.5
6.0
6.5
7.0
7.5
8.0
Economic Freedom Scores: Norway, Russia, Poland
score (10 = most freedom)
Norway
Russia
Poland
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20105.6
5.7
5.8
5.9
6.0
6.1
6.2
6.3
6.4
6.5
China's Economic Freedom Score
score (10 = most freedom)
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
The United States: A Unique Experiment in Freedom
I. Founded on belief in God and Libertya. Declaration of Independenceb. Liberty involves limits on governmentc. Defused power, checks & balancesd. Complex social & economic problemse. Formula for freedom highly successful
The United States: A Unique Experiment in Freedom
2. Rise in living standardsa. Government could solve problemsb. Shift in power & influence
The United States: A Unique Experiment in Freedom
3. Progress toward freedom interrupted a. 1st “progressive” movement: c. WWI
b. 2nd “progressive” movement: 1930sc. 3rd “progressive” movement: 1970sd. 4th “progressive” movement: 2000s
The United States: A Unique Experiment in Freedom
3. Progress toward freedom interrupted a. 1st “progressive” movement: c. WWI
b. 2nd “progressive” movement: 1930sc. 3rd “progressive” movement: 1970sd. 4th “progressive” movement: 2000s
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20101
5
9
13
17
United States Economic Freedom Rank
Source: Fraser Institute; Economic Freedom of the World, 2012 Annual Report
The United States: A Unique Experiment in Freedom
4. Factors eroding freedom 2010 a. increase use of eminent domainb. war on terror and drugsc. violation of bondholder property rightsd. size of governmente. regulationf. trade restrictions
The United States: A Unique Experiment in Freedom
4. Factors eroding US freedom since 2010A. Fiscal policies
1. federal spending 2. private compliance spending3. public debt
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20221.0
2.0
3.0
4.0
5.0
6.0
Federal Spending(fiscal years trillions of dollars)
trillions of dollars
President Obama'sBudget
Ryan's HouseBudget
Source: President's Budget for Fiscal Year 2013; The Path to Prosperity (House Budget).
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20221.0
2.0
3.0
4.0
5.0
6.0
Federal Receipts(fiscal years trillions of dollars)
trillions of dollars
President Obama'sBudget
Ryan's HouseBudget
Source: President's Budget for Fiscal Year 2013; The Path to Prosperity (House Budget).
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20225
10
15
20
25
Federal Debt Outstanding(fiscal years)
trillions of dollars
President'sBudget
Ryan's HouseBudget
Source: President's Budget for Fiscal Year 2013; The Path to Prosperity (House Budget).
The United States: A Unique Experiment in Freedom
4. Factors eroding US freedom since 2010B. Rule of Law:
1. Government controls over healthcare 2. Government controls finance: Dodd-Frank 3. Edicts undermine law: immigration, welfare
4. Waivers from complying with law 5. Failure to enforce race-neutral laws
What Lies Ahead?
• Loss of freedom from current trends– Healthcare law: government controls healthcare– Financial reforms: government controls finance– Edicts undermine law: immigration, welfare– Waivers from complying with law– DOJ failure to enforce race-neutral laws
The US economy is struggling due to the erosion of economic freedom
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
Election Implications
I. Federal Spending: 2014 President Obama $3.88 trillion Romney-Ryan $3.48
Difference: $400 billion
2. Regulatory Compliance: President Obama $2.4 trillion Romney-Ryan $2.0
Difference: $400 billion
Outline
I. Economic FrameworkII. How Economic Freedom Promotes
Prosperity III. Global Freedom & Economic TrendsIV. US experience with economic freedomV. Impact of the US ElectionsVI. What Lies Ahead for the US & the World
What Lies Ahead?
The good news:
Freedom in the world is increasing
The US has a history of recovering
The End
Robert GenetskiWebsite: ClassicalPrinciples.com
312-565-0112
Questions or Comments
Robert GenetskiWebsite: ClassicalPrinciples.com
312-565-0112