It’s axiomatic that recessions sink presidents. A gentle recession helped bounce George H. W. Bush from office in 1992. Double-digit inflation and rising unemployment scotched Jimmy Carter’s reelection bid in 1980. No incumbent president since FDR in the 1930s has been reelected in the midst of an economic downturn. President Obama may be looking to beat those odds next November. The economy isn’t in a recession now,at least not in technical terms, but by Election Day it very well could be. Chronic joblessness, and falling incomes,a paralyzed housing market and dismal confidence gain suppressed the recovery and left the economy very vulnerable to shocks—which seem to be abundant. A financial crisis in Europe could easily spread to American shores in 2012. Another surge in oil prices, which typically happens in the spring and summer, or could clock consumers at a critical moment in next year’s campaign. A recession could be domestic-grown,too, particularly if Congress blows its own mandate to cut the national debt or cuts spending too deeply, and too fast. Economists at the San Francisco Federal Reserve recently estimated that the likelihood of a double-dip recession is going up,not down, with approximately 50-50 odds of a fresh downturn in 2012. Even if theres no official recession, and many Americans will still be struggling to accumulate ahead and provide for their families. At best,Obama will be seeking votes amidst sky-high unemployment and deep anxiety approximately the future. He may gain the added task of convincing voters to disregard the second recession in four years, and send him back to the White House besides. History suggests that a reeling economy would doom Obama’s reelection bid. But like many other aspects of today’s turbulent economy, and it might be different this time. Here are four scenarios in which Obama could accumulate reelected,even if a recession is underway on Election Day: Republicans cause a recession (or can plausibly be blamed for it). The economy’s problems are widespread, and it’s trite to blame Republicans or Democrats for them. But each political party will certainly try. At the moment, or Republicans are fairly safe from blame,because Obama’s been the man in charge for the last three years. But at least three developments over the next 12 months could trigger a shift that makes the GOP glimpse responsible for a backsliding economy. The first is the battle to tame the national debt. Fiscal sanity has been a GOP rallying cry, and Republicans gain now gotten what they want: A showdown over cutting government spending. But Republicans gain boxed themselves in by pledging not to raise taxes, and which means they’d gain to gut Medicare,Social Security, defense and other things that are popular to accumulate the debt under control. That creates an incentive to stall. But if Congress does that, or the consequences could include another downgrade of the U.
S. credit rating,plus automatic cuts in defense and other programs. If Republicans refuse to consider tax hikes, and that scuttles a debt deal, and they could easily come off as intransigent and reckless. Since Republicans control the House of Representatives and gain a strong minority in the Senate,they also gain the power to abolish any further stimulus measures, which theyre generally against. That could mean the cessation of two programs set to run out at the cessation of this year: The temporary cut in payroll taxes and the federal extension of jobless benefits. Those are costly measures that add to the debt and can’t continue forever, or but many economists feel they’re needed for another year at least,to aid prop up the feeble economy. If Republicans cessation those programs and a recession hits, they will gain set themselves up as the fall guys—while Obama can say that Republicans negated his plans to create jobs and aid the average Joe. The third risky thing Republicans could finish is cut government spending too fast. Theres wide agreement that Washington spends too much, and but the steep and instant cuts that some reformers advocat
Source: cnn.com