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Goldman Sachs: A Democratic sweep would mean faster economic recovery
https://www.cnn.com/2020/10/06/business/economy-election-blue-wave-goldman-sachs/index.html
New York (CNN Business)President Donald Trump is once again warning voters that Democrats would "shut our economy and jobs down" if they win in November.
Goldman Sachs is telling its clients the exact opposite.
Just hours after Trump's all-caps Monday morning tweet predicting economic disaster, Goldman economists pointed out that polls "suggest a 'blue wave' in which Democrats gain unified control of Washington is becoming more likely" -- and they're not suggesting investors dump stocks.
In fact, "all else equal, such a blue wave would likely prompt us to upgrade our forecasts," Goldman Sachs chief economist Jan Hatzius wrote in a Monday report.
It's true that if Democrats sweep into power early next year, it would likely translate to higher taxes and regulation. Such a reversal from the Trump agenda could eat into corporate profits and the earnings for affluent families.
But Joe Biden is also promising a bonanza of government spending that, coupled with extremely low interest rates, would likely speed up the economy.
Goldman Sachs wrote that a blue wave would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. The bank also cited Biden's longer-term spending plans on infrastructure, climate, health care and education.
New York (CNN Business)President Donald Trump is once again warning voters that Democrats would "shut our economy and jobs down" if they win in November.
Goldman Sachs is telling its clients the exact opposite.
Just hours after Trump's all-caps Monday morning tweet predicting economic disaster, Goldman economists pointed out that polls "suggest a 'blue wave' in which Democrats gain unified control of Washington is becoming more likely" -- and they're not suggesting investors dump stocks.
In fact, "all else equal, such a blue wave would likely prompt us to upgrade our forecasts," Goldman Sachs chief economist Jan Hatzius wrote in a Monday report.
It's true that if Democrats sweep into power early next year, it would likely translate to higher taxes and regulation. Such a reversal from the Trump agenda could eat into corporate profits and the earnings for affluent families.
But Joe Biden is also promising a bonanza of government spending that, coupled with extremely low interest rates, would likely speed up the economy.
Goldman Sachs wrote that a blue wave would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. The bank also cited Biden's longer-term spending plans on infrastructure, climate, health care and education.
Republicans destroy the economy and Democrats rebuild it. Rinse and repeat. Lets not forget the trillions that were given away in tax cuts and stimulus without actually helping much.
10 replies
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I think they are correct here that a Dem wave will be good for the economy. I think they are WRONG that it means more spending. Biden et al. will have to dig us out of the hole that Trump et al put us in.
DUMP TRUMP 
