Why Bipartisanship Is Important for U.S. Economy

President Joe Biden ran his campaign on the idea that he is able to work across the aisle to compromise to nurture bipartisanship during his time in office. A senate that has become even more divided over the last 12 years. Former Majority Leader, now Senate Minority Leader Mitch McConnell, self-declared ‘Grim Reaper’, wielding the power of ‘no’ to kill any legislation, not to his liking, is at the head of the deeply divided senate. Progressive senators including Bernie Sanders, now chair of the influential Budget committee, are promising aggressive actions from the Democrats to pass stimulus and other progressive legislation without a 60/40 majority.

The impeachment trial, which has just been voted constitutional, is a concern many GOP lawmakers have. Though the articles of impeachment have passed through the House, to finalize the impeachment the senate will need a 67 super-majority vote—anything else will lead to an acquittal. While Democrats hold the House majority, the senate is divided 50/50 with Vice President Kamala Harris to break ties. So far only 3 GOP senators have announced their decision to vote for impeachment, Democrats are still short 14 votes. The impeachment trial overall has been called a “waste of Congress’s time”. Since Former President Donald Trump no longer holds office, many are wondering why this is taking priority over other urgent bills. Senator John Cornyn (R-Texas), the advisor to Senate GOP leadership has shared that the impeachment trial is “not a good start” for bipartisanship. There is already growing resentment towards Democrats, apparent in the 11 votes against establishing rules for trial and 44 votes to declare the impeachment trial unconstitutional.

President Joe Biden has, however, kept his word and met with GOP members to negotiate the next COVID-19 stimulus bill. The result of the meeting was a lowering of the requirements for the next stimulus check to a threshold of individual income of $75,000 and family income of $200,000. Overall, the stimulus bill still sits at a whopping $1.9 trillion, which in addition to previous COVID-19 relief bills come out to $5 trillion in just a few months. The end of this public health crisis is nowhere in sight, additional spending will likely be required over the next few months. So where is all this money coming from when our debt to GDP ratio is at 130% already? The answer is: more debt.

To fund the 2.2 trillion CARES Act, the Treasury essentially borrowed from investors by selling government and corporate bonds. The Treasury can also create digital dollar credits, but if too much gets withdrawn, more greenbacks will have to be printed. This means that inevitably, the government will have to increase the number of paper dollars, which dilutes the currency’s value and causes inflation to rise. Over the next few years—as it has been for years now—the price of living will not move down with the value of the dollar, instead, it is likely to continue increasing while savings and cash will start to decline in value. These stimulus bills are also taking away from essential lending markets, which makes it more expensive for companies and local governments to borrow. Corporations have already started a loan binge to buyback stocks and artificially inflate their values—which is why the stock market has recovered while millions remain unemployed, bankruptcies are rampant, and businesses have closed their doors for good. All of this is to say that there is a growing debt bubble that has blown up during the pandemic and will continue to if Democrats keep to their word on passing aggressive legislation without a 60/40 majority vote.

Soon the bubble will likely pop and things will start to crumble. It will affect anyone and everyone, devastating millions in the process. True bipartisanship will lessen the likelihood of a crash, though it is inevitable, aggressive spending will only accelerate the process. One way Americans can protect themselves from the looming economic crash is to invest in historically proven safe-haven assets that hold and grow in value without the stock market. Many retirees have a traditional 401(k) or are invested in the stock market. As seen in the ‘08 crash, retirees were hit hardest as they lost almost half of their retirement savings. Since then savvy investors have been diversifying their portfolios with precious metals. Precious metals, especially gold and silver are a proven hedge against inflation, often moving inversely to the stock market.

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