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Outlook for the Economy & Financial Markets

Outlook for the Economy & Financial Markets. Robert Genetski Website: ClassicalPrinciples.com 312-565-0112. Outline. Economic Framework Economic Freedom & Prosperity US economic weakness & financial crisis Debt crises: Europe and US Impact of the US Elections

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Outlook for the Economy & Financial Markets

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  1. Outlook for the Economy & Financial Markets Robert Genetski Website: ClassicalPrinciples.com 312-565-0112

  2. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  3. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  4. Outline What causes booms and busts in the Economy? 1. Keynesian framework 2. Classical framework

  5. Classical Economic Principles • Characteristics -- fundamental to our human nature -- universal: apply to all people in all countries -- timeless

  6. 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.

  7. Classical Economic Principles 3. Classical Policies: -- low tax rates & limited government -- free markets -- protection of property rights -- a stable currency

  8. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  9. Freedom & Economic Prosperity 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

  10. Freedom & Economic Prosperity The most effective solution to promoting growth and prosperity is to spread economic freedom throughout the world.

  11. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  12. Key Issues • 2000-052005-10 • Federal Govt. Spending: 38% 40% • Private Spending 24% 9% • 200020102014 • Annual Regulatory • Compliance expenses: $1.0 $1.8 $2.2 • (trillions of 2010 dollars)

  13. Monetary Policy & the Financial Crisis

  14. Economic Freedom & US Weakness

  15. The United States: A Unique Experiment in Freedom 3. Progress toward freedom interrupted a. 1st “progressive” movement: c. WWI b. 2nd “progressive” movement: 1930s c. 3rd “progressive” movement: 1970s d. 4th “progressive” movement: 2000s

  16. The United States: A Unique Experiment in Freedom 4. Factors eroding freedom 2010 a. increase use of eminent domain b. war on terror and drugs c. violation of bondholder property rights d. size of government e. regulation f. trade restrictions

  17. The United States: A Unique Experiment in Freedom 5. Further erosion of freedom since 2010 a. size of government b. regulation c. controls over healthcare d. controls over financial industry e. edicts instead of laws (immigration, welfare) f. waivers from complying with law (healthcare) g. failure to enforce race-neutral laws

  18. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  19. Outline • Economic Framework • How Economic Freedom Promotes Prosperity • Global Freedom & Economic Trends • US experience with economic freedom • Impact of the US Elections • What Lies Ahead for the US & the World

  20. Election Implications • Federal Spending: 2014 President Obama $3.88 trillion Romney-Ryan $3.48 Difference: $400 billion 2. Regulatory Compliance: President Obama $2.4 trillion Romney-Ryan $2.0 Difference: $400 billion

  21. Outline • Economic Framework • Economic Freedom & Prosperity • US economic weakness & financial crisis • Debt crises: Europe and US • Impact of the US Elections • What Lies Ahead for the US & the World

  22. What Lies Ahead? The good news: Freedom in the world is increasing The US has a history of recovering

  23. The End Robert Genetski Website: ClassicalPrinciples.com 312-565-0112

  24. Questions or Comments Robert Genetski Website: ClassicalPrinciples.com 312-565-0112

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