The United States is gearing up for one of the biggest democratic showdowns in the month of November 2016. The nation is all set to elect its next President, as Barack Obama’s second term is nearing its end. The system is one of the indirect voting types, where voters cast their votes to choose electors. The presidential electors then through the Electoral College elect the new President and Vice President. Being counted as one of the largest national economy and accounting for 22% of the global nominal GDP and 17% of global GDP, the US elections are bound to have an impact on the nation’s as well as on global economy.
Majority of the international transactions is done through the US Dollar and it is also counted as one of the top reserve currencies. The US follows mixed economy and the major developed economies as Canada, China, United Kingdom, Japan, South Korea and others are its largest trading partners. All these factors indicate the importance of the US economy and as a result the Presidential candidates signify the impact of the US Presidential elections may have on the global economy. For the democratic nomination, Hillary Clinton remains the topmost choice followed by Senator Bernie Sanders. While the leading possibilities among the Republicans is the billionaire Donald Trump, closely followed by Ted Cruz, Senator of Texas, Marco Rubio, Senator from Florida, John Kasich, and Ben Carson.
It would be interesting to see how the nominated candidates approach several issues cornering the American voters- including unemployment, immigration, national security and last but not the least economic growth which would in turn have a huge impact on the global economy. Clinton and Trump’s approach on several economic policies differs a lot which maybe a sign of worry for the American voters. Donald Trump doesn’t endorse much trade liberalization and there are possibilities that huge tariff may be imposed on foreign imports from Mexico and China- while Clinton has more or less varying approach on the issue which lead to the possibilities of trade war. Regarding financial system, the Republicans and Democrats both oppose bail outs but the Republicans differ on offering too much loose monetary policy. The Republicans are also are not in much favor of excessive discretion for the US Federal Reserve. All these factors may count while appointing a new Fed chief and as a result the new President may have an indirect impact on the policy making, exchange rates, interest rates and global financial markets.
Another factor approached differently by the Republicans and the Democrats is the income tax and the spending plans. $18 trillion of investment is being proposed by the Democrats which include free of cost tuition in public colleges, a new health care system covered by a single payer, infrastructure investment and others. While the Republicans are in favor of reducing personal income tax rates with focus on cutting America’s corporate tax rates there are many who are proposing imposing a flat tax on consumption while replacing personal and corporate income taxes.
Overall the Democrats and the Republicans differ starkly on various economic issues, which makes it tougher for the common American voter to exercise his voting rights.