Obama or Romney: Who's better for your finances?
One economist says it's pretty simple: Richer folks will likely benefit more from Romney's policies, while lower-income Americans will benefit more from Obama's.
When it comes to deciding which candidate is better for your financial life, the answer isn't entirely obvious. In fact, voters hold widely varying views on how the two candidates will likely influence the economy, often depending on their own income levels and financial situations.
Here's where Americans stand:
Voters believe presidents have a big impact on their money—to a degree.
"The economy is really on people's minds at this point, even more so than in past years just because it has been such a tough last couple years for Americans' finances," says Claes Bell, senior banking analyst at Bankrate.com, although he adds that "pocketbook issues" often play a major role in elections.
A Bankrate.com survey taken in June found that almost six in 10 Americans say their personal finance situation is either the most important factor or one of the most important factors in determining which candidate they'll vote for.
Still, Americans are skeptical that either candidate will actually be able to substantially improve their financial lives. Half of the survey respondents said that when it comes to affecting their own finances, it doesn't matter which president ends up getting elected. "It seems like people are thinking, 'We're stuck in the economic rut, and they doubt that specific policies will help us out,'" says Bell. Among those who thought that the president would impact their personal finances, they were equally divided on selecting the better candidate.
Americans are faced with two candidates who offer sharply different views on economic policy.
"The Romney crowd would say, 'If we have low taxes, and we get rid of regulation and reduce public spending, the economy will grow at a faster rate.' They're being guided by the (Paul) Ryan budget, (which includes) significant cuts in taxes and cutting back the size of the state," says resident fellow at the American Enterprise Institute Desmond Lachman. Much of that is designed to stimulate business, he adds, "so you'd think it would be beneficial to people owning stocks, people in the upper-income brackets."
Lachman adds, though, that the Federal Reserve's policies under President Barack Obama have helped to buoy equity prices, and Republican Presidential candidate Mitt Romney would likely take a different approach. (Romney has said that he would replace Fed Chairman Ben Bernanke.)
Obama, meanwhile, has focused more on economic policies that affect the middle and lower classes, including health insurance coverage, student loan support, social services, and extending the payroll tax cut. "At the high-end of the income scale, he'd be raising taxes, whereas the Ryan budget cuts taxes across the board," says Lachman. Obama has also supported the extension of benefits for the unemployed as well as other social services, from food stamps to Medicaid.
Of course, presidents don't make policies unilaterally, and each candidate would have to work with Congress to pass legislation. For Obama, that could mean working again with a Republican-dominated Congress. "Tea party members are not prepared to compromise, so I'd expect you'll get more of the same in terms of economic performance," Lachman says.
In general, Lachman says, people in the upper-income brackets will likely benefit more from Romney's policies, while lower-income Americans will benefit more from Obama's.
Republicans and Democrats feel differently about their own financial situations and the financial health of the country.
"Partisanship seems to be having a pretty intense effect on how people view their personal finances," says Bell. A recent Bankrate.com survey found that a third of Republicans feel "more comfortable with their debt now versus one year ago," while just one-quarter of Democrats said the same. Possible reasons include that Republicans might fall into the higher-income bracket and have lower debt levels, or that Republicans tend to be more fiscally conservative in both their private lives and political beliefs, says Bell.
Bell believes respondents who support Obama also tend to feel more optimistic about the economy, and to "feel things are going better than they are," while Romney supporters tend to "feel things are going worse than they actually are." The intense emotions surrounding the election, he says, appear to be affecting perceptions of the economy.
Age and income level have an influence on how voters perceive the election.
Age also has an impact on voters' views. Bankrate.com found that among voters under age 30, 10 percent said their personal financial situation will be better under Romney, while 29 percent said it will be better under Obama.
A recent Pew report found that 63 percent of Americans say Republicans "favor the rich over the middle class and poor," and seven in 10 "believe the policies of a President Mitt Romney would be good for wealthy people." Meanwhile, six in 10 respondents said Obama's policies will help the poor, and half said they will help the middle class. Pew concludes that among middle-class adults, "neither candidate has sealed the deal."
As both candidates make their case to voters in the final months leading up to the election, each will try to do just that.
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I'm voting for Romney and I am not rich by any means.... I'm just not stupid enough to vote for Obama:)
The Obama so called Payroll Tax Cut, is actually cutting from ones Social Security payments!!!!
Bet lots of people don't know that!
Well, I don't like to think of it as which one is better for my finances. I'm personally responsible for my own finances, and don't expect either of them to do anything for me personally.
What I'd really like to see is a candidate who clearly recognizes the financial cliff we're standing on the edge of as a nation, and has the leadership to tell the country that we've got some difficult times ahead, that everyone is going to have to make sacrifices to get the federal debt under control (that includes taxes increases and benefit reductions BOTH).
Of course, someone who has the courage to say that would never get elected, because the lower economic half of the population wants more government assistance and the upper half wants to have more freedom to earn without excessive taxation, and neither of them are willing to give up their own personal interests.
If you want to see things get better in the future, do something about it personally. Don't wait on the government, or anybody else, to do it for you, because you'll be waiting around for a long, long time. Buy U.S., spend wisely, save a little something, be generous to those around you who need help (don't assume some agency will take care of them, you take care of them), and see what happens. You'll be responsible for making a positive difference in your community.
Until Americans get back to doing the basics, and really tighten their belt, we'll keep overspending and point our fingers at each other, getting nothing accomplished. If that's what you want, count me out.
I would have written earlier but that headline made me laugh so hard I think I tore something. The answer is: D. Neither of the above.
Sorry Mitt, it's not your turn. There are still social programs which need gutting, & no white man will ever be allowed to do it. So Obama gets 4 more to pull away the safety net. Then you, or someone like you, can step in to let Wall Street run wild.
That's when those of you who have high paying jobs will be robbed through some kind credit scam. There's no government help anymore, so you too will wind up as wage slaves. Gold is too massive to make a usable parachute. Outstanding debt will entitle the thieves to a bailout.
Of course we don't want food riots (see 1789 France & 1917 Russia), so food stamps will still be available.
**LIBERAL BIAS ALLERT** The liberal spin in this article is unbelievable. And, bankrate.com is cited as a source, as if it is neutral. Rather, bankrate.com routinely puts out articles published on this site which have tremendous liberal bias. While the article is correct that Obama focus on lower income voters, or the "taker class" whose votes he tries to buy with redistributed wealth--Socialism--Romney's policies are not designed to benefit the rich. Rather, Romney and Republicans want to grow the economy so it's better, and so there's more for everyone. Isn't the idea for the economy to improve and for everyone to have opportunity, to have jobs, and to prosper, not for the government to support people.
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