Romney Boomlet

I will don my Prophecy Podcast turban and predict that if Romney wins there will be a little boomlet. 

A lot of the investor class are sitting on money, and are not borrowing money to expand because they see the risk of another Obama term as too large. So if Romney is elected we will have a self-fulfilling prophecy and the economy will improve. This may allow the US to avoid the mini-crunch that most pundits are predicting for next year. The bad 2013 prediction of many, me included, is the combination of the expiration of the Bush Tax cuts, the expiration of the temporary Social Security tax cut, the first layer of Obamacare taxes, and the forced spending cuts—all happening at once. But if Romney is elected the Bush tax cuts will be extended, Obamacare might be repealed, and the “animal spirits” as Keynes called it, consumer confidence, will increase. 

While it is anecdotal, I have had many people tell me that they are holding off making any investments until after the election. These investor “animal spirits” will be an important factor if Romney is elected. 

But will it last? 

Unless Romney is a lot better “dancer” than I think he is, then no, the respite will be temporary. Get ready for an extended period of national decline