Recessions occur in election years as market looks for a bailout. Until the election…the staircase up continues.
Good depiction here….SPY
The issue after the next election and collapse in Sep-Oct 2020 will be how high taxes? Will it kill volatility?
To consider…
http://fortune.com/2016/02/17/bernie-sanders-taxes-2/
For his proposal, Sanders relies on analysis prepared for the Robin Hood Tax Coalition by economists Robert Pollin and James Heintz. They assume that if the United States were to tax stock sales at 0.5%, bond sales at 0.1%, and derivative sales at .005%, it would reduce trading volumes by 50% and raise $352 billion per year. Sanders wants to use some of this money to fund a program to provide free public education for college students, which the campaign estimates would cost the federal government $47 billion per year, with the remaining $23 billion of the cost covered by state governments.
Other analysts are not so optimistic about the revenue-raising possibilities of the plan. A recent analysis of various financial transaction taxes by the Tax Policy Center found that a well-designed FTT could bring in about $75 billion per year, still probably enough to pay for Sanders’ public education proposal, but not nearly as much as the Vermont Senator hopes.
- New marginal tax rates of 37%, 43%, 48%, and 52% for income earned between $250,000 and $500,000, $500,000 and $2 million, $2 million and $10 million, and above $10 million, respectively;
- An increase in capital gains taxes so that income from investments is taxed at the same rate as income from labor;
Could Bernie have won?
“The national survey of more than 1,600 registered voters, conducted by Gravis Marketing two days before the general election, found that Sanders would have received 56 percent of the vote while Trump would have won 44 percent. The poll was commissioned and financed by outgoing Florida Congressman Alan Grayson, a Democrat who endorsed Sanders in the presidential primary.
The last election result that decisive was Ronald Reagan’s victory over Democrat Walter Mondale in 1984.
Crucially, independent voters, who made up nearly one-third of the general election voters this year, favored Sanders over Trump, 55 percent to 45 percent, the poll found. Hillary Clinton, by contrast, lost independents 48 percent to 42 percent, according to exitpolls.”
A mixed bag in 2020 with bailouts from Ryan and Trump in October BUT an incoming Bernie-like president with high taxes. If financial activity is reduced 50%, GDP could contract by 10% as 21% of GDP is now finance related. Contrary to popular opinion the 1% can be sacrificed for political gain.
Credit Flow Investor 