Former Trump senior economic adviser Steve Moore argues that a Democratic sweep could lead to the Dow Jones Industrial Average drop 1,000 points.
Former Trump senior economic adviser Steve Moore argued on Tuesday the day Georgia voters go to the polls for Senate runoff elections that a Democratic victory could make the Dow Jones Industrial Average fell by 1,000 points.
Moore emphasized in “Cavuto: Coast to Coast” on Tuesday that he believes a Democratic sweep will be “bad” for markets that aim for the historic record.
“I looked at the evidence of what happened in the past 60 years or more with respect to the stock market in terms of three different scenarios: one is that Republicans control everything in Washington, the second scenario being Democrats control everything in Washington, third being divided control of power and, in general, the best scenario for economic growth is when you share power, ”said Moore.
“The worst case scenario in the last 50 or 60 years is when Democrats have control over all the levers of power, so I think the historical record is pretty clear about that, that a Democratic sweep tonight would be bad for the markets,” he continued.
Georgia races will determine Senate control. If both or one of the Republicans wins, the upper house can serve to check the Democratic legislative agenda. If the two Democrats win their stubborn struggles, Vice President-elect Kamala Harris can vote for the tiebreaker.
Moore acknowledged on Tuesday that he does not think Democrats will gain control of the Senate, but noted that this is possible, since “disputes are looking very close.”
Biden has promised to impose new taxes on corporations and wealthy individuals who earn more than $ 400,000 a year, but he will almost certainly face a Republican hurdle if Democratic candidates in Georgia’s Senate race lose on Tuesday.
Biden repeatedly said he would reverse President Trump’s 2017 Tax and Employment Reductions Act and increase the corporate tax rate from 21% to 28%, restore the individual tax rate from 37% to 39.6%, earnings capital tax as ordinary income, limit deductions to those who earn more, expand Earned Income Tax Credit to workers over 65 and impose Social Security payroll tax on wages over $ 400,000. Without a Democratic-controlled Senate, such tax increases are probably out of the question.
BIDEN’S TAX-THE-RICH AGENDA FACES THE ROADBLOCK SENATE IF GOP MAINTAINS MAJORITY
But if the second round ends with a Democratic victory, the new president will have more leeway to implement his agenda, which includes higher income tax rates, increased Social Security payroll tax, new tax credits and less deductions, among other rounds of massive government spending.
“Another thing to note is that people are calling it $ 2 [trillion] to $ 3 trillion of disputes for the Senate and that’s because I believe that if Democrats win these two contests, they will feel they have the voters’ mandate to move forward with a beautiful left agenda and that it will start with a big stimulus plan in January, ”Moore said.
After months of stalled negotiations, the next installment of aid for coronavirus was approved by both chambers of Congress shortly before Christmas.
The $ 900 billion coronavirus package, which was significantly less than the House Democrats’ $ 2.2 trillion stimulus bill voted in October, will send a $ 600 direct stimulus payment to most Americans, along with a new round of subsidies for businesses, restaurants and theaters.
Many Democrats are in favor of raising coronavirus stimulus payments to Americans from $ 600 to $ 2,000. The bill to increase the size of checks was approved before Christmas in the stimulus package approved by the Chamber of Deputies by a narrow margin.
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Senate majority leader Mitch McConnell said that Democratic leaders sought to approve a package that would vastly increase national debt and provide money to families that do not desperately need help.
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Megan Henney of FOX Business contributed to this report.