u.s. elections and the outlook for the global economy robert genetski website:...

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. 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.


3. Classical Policies:

-- low tax rates & limited government -- free markets -- protection of property rights -- a stable currency


Outline



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

$40,000Economic 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



2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20106.6

7.1

7.6

8.1

8.6European 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

8.0Economic Freedom Scores: Norway, Russia, Poland


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


Outline



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


2. Rise in living standardsa. Government could solve problemsb. Shift in power & influence


3. Progress toward freedom interrupted a. 1st “progressive” movement: c. WWIb. 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


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


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)


President Obama'sBudget

Ryan's HouseBudget


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)


President'sBudget

Ryan's HouseBudget



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



Election Implications

I. Federal Spending: 2014 President Obama $3.88 trillion Romney-Ryan $3.48

Difference: $400 billion2. Regulatory Compliance: President Obama $2.4 trillion Romney-Ryan $2.0

Difference: $400 billion

Outline



What Lies Ahead?

The good news:

Freedom in the world is increasing

The US has a history of recovering

The End


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Questions or Comments


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u.s. elections and the outlook for the global economy robert genetski website:...

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