0:00 Hi all, Today we'll talk about US Presidential election I had a divine inspiration the person who will be elected President of the US this time is We'll not predict it Today I plan to sort out the policy propositions of the two parties. What are the differences between Trump and Harris? Some of them are unique policies for this election, but most of them are just a continuation of the policies of both parties So we are taking advantage of this election to look at the policies of both parties in the past half century We'll also analyse the impact of their policies on the economy and the market.
0:49 Sounds exciting? I thought I knew quite a lot but when I was researching I learnt even more Before I start, you may know that I want to explain that we will mainly focus on economic policy and economic impact. Issues like abortion LGBTQ including the Israeli issue We will not discuss iT To be honest, our audience base is getting wider and wider. I am mainly afraid that everyone will quarrel and will even put blame on me..so I'm anxious about that and I strive to talk about the policies of both sides without any political inclination. If you feel that I seem to be biased... Don't think too much about it, I really am not It just means I'm not balancing it well because it's really difficult, hope you can understand it The two parties are the Republican Party and the Democratic Party. The Republican candidate is DonaldTrump
1:34 colour is usually Red the representative animal is elephant Democrat candidate is Kamala Harris colour is usually Blue representative animal is donkey I guess if you are not so familiar with the two parties, If I repeat Republican, Democrat Trump, Harris You might get confused throughout the video So I thought of a little trick. I planned to keep these two on the top of the screen I will light up when I mention the person Republican Democrat Trump Harris Isn't this better Okay, let’s start The policy direction of both parties will be divided roughly into these segments Let’s look at taxes first. I think this is the biggest impact on economy Their difference can be boiled down to something really simple Trump supports tax cuts and Harris supports tax increases.
2:20 Trump mainly wants to reduce taxes on the rich and corporations. Actually, under Obama, the corporate tax rate in the US had always been 35% but after Trump came to power, it was directly cut to 21% This time Trump said that 21% is not low enough, I can further reduce the tax For domestic manufacturing companies from 21% to 15% is akin to tax havens that we have talked about before. On the Democrat Harris side they support tax cut for small and medium enterprises it's just about the amount of tax reduction But this is not the main point The main point is that sorry big cor[s I want to increase your tax to 28% She also wants to increase subsidies for low-income individuals, such as giving more money and tax breaks to those with children at home As for the rich If the annual salary exceeds $400,000, more tax
3:05 If annual income exceeds $1 million even more tax More capital gain tax tax on stock buybacks. Individuals worth more than $100 million will also have a minimum tax. So it is obvious that the Democrat is raising taxes on big corps and the rich. Of course what I mentioned are quite general The policies they promoted are actually not clear when it comes to its execution Sometimes there'll be tax cut here, tax increase there They might not even implement it fully when they get into power I won't dive into a detailed breakdown for everyone We'll just get the general idea We talked about the difference between their taxes. What specific results will it lead to? The first is the difference in debt The most closely connected with the global market is not taxation, trade, regulations. I would say it is the U.S. national debt. The world's most important currency is the U.S. dollar.
3:50 The core of the USD is its interest rate What should we look at in the USD interest rate? For short term, listen to The Fed but in the long term, it depends on the government bonds. The more the government bonds are issued, the supply will increase. Prices will fall, and interest rates will rise. These are all connected so we will not expand on this. Of course, during campaign they will definitely not say how much more debt I want to borrow. This definitely will not happen But everyone can see that with them lowering tax while not spending any money So where is this money coming from? So, it's going to be borrowing, right? In short, if Trump comes to power, this debt will increase faster. On Democrat side the borrowing is quite a lot too but generally relatively speaking her budget will be a bit more restrained holding back slightly The current public debt of the U.S. government is $28 trillion which is about 99% of GDP. According to Bloomberg estimation if Trump takes office, the debt will rise to 116% of GDP by 2028 and Harris side will rise to 109%.
4:37 So did you see both will increase The US government will continue to expand its debt scale, it's just that Trump's side is more radical Let me add a little Some of you may have some doubts about our figures. The debt of the US government has already exceeded the debt limit of 31 trillion long ago . Why did you say $28 trillion? You remember correctly. Actually the nominal debt of the U.S. government is more than $31 trillion and has exceeded $35 trillion. But just now I said that $28 trillion is its public debt. What does this mean? Many of the debts here are held by U.S. government departments themselves For example, social security funds, medical insurance funds civil service funds It's like owing money to your own family like your first uncle owing your third uncle If we consider the U.S. government as a whole the debt is about $28 trillion which is 99% of GDP. In addition to the difference in debt,
5:23 if Trump comes to power, more foreign capital may flow into the United States. Think about it, he is cutting taxes for big corps and the rich as well as investment tax cuts This will naturally attract more foreign investment compared to Democrat During his previous term, he did allow a lot of MNC's capital to flow back to the United States. Also, Trump’s tax cuts will definitely have a stimulating effect on the economy in the short term, so he will also be more inclined to benefit the capital market and the stock market. On the Democrat side, they are raising tax on the rich right It will further reduce the wealth gap So we've talked about taxes which is how the government collects money Then next will be how the government spends money which is government spending . By now, we all know that the U.S. government is very good at spending money. Historically both parties have been very good at spending money The difference between them is not on the amount of spending. But in terms of direction. Trump emphasized that there are not many area where
6:09 he wants to spend money Mainly on national defense Harris on the other hand pays more attention to social welfare . For example, families with children will be given subsidies Providing relief to low-income groups mostly expenditure on Social Security including education, medical care, etc. They attach great importance to it In short, they focus on universal welfare. The government needs to spend more money on these aspects. Actually Harris is not a special case because Democrats has always been like this in this regard. If you look at the previous presidents, for example, "Obamacare" health insurance for all including Biden's giving out money to citizens most of it is to support these low-income groups. Let's look at the long-term impactc/ Actually, it's hard to say whether the government should spend money on healthcare and social security or on national defense in the long run Let’s just look at the short term. First, on Democrat side it is a security policy. In the short term, it will definitely reduce the wealth gap There’s nothing more to say about it
6:54 But there's a very interesting phenomenon. Let me tell you, I was a little surprised when I saw this number. You see, the past six presidents of the United States were exactly three Democrats, three Republicans, Democrat has one extra term but hey are roughly the same in terms of time. If we look at the statistics of new jobs in US for the past 35 years, the United States has probably added 51 million new jobs and 96% of it which is about 49 million new employments occurred during the Democrat presidential period. Only 4 % happened during the Republican era. It's surprising Actually, since World War II there has been a notable correlation between employment and political parties During Democrat era it does seem to be more effective at stimulating employment I think the main reason is that on the one hand, it paid more attention to the government expenditures and also more attention to to the employment situation of low-income people.
7:40 After all, they are the majority of the people So the overall employment data will look much better The next significant difference between both parties is trade. The two parties have a relatively unified direction The direction is to de-globalize Trade protectionism leave the work to the Americans, specifically targeting China They are actually similar in this Trade tariffs and technology restrictions Let’s look at the overall trade policy On Trump Republican side He is more radical we all know that Trump loves tariffs very much. He said that the tariffs on all goods should be increased to at least 10% or even at least 20%. Note that it is all tariffs. Then the tariffs on Chinese goods must be increased to at least 60%, Tariffs should also be applied to imports from Mexico tariffs on non-dollar imports, too Of course if he was elected, we don’t know how much he will be able to implement these things
8:25 But his radical trade protectionist attitude is very obvious . Harris’s side Actually, she hasn’t said much about trade policy with Europe, Japan, or Canada It's relatively friendly in general. It's mainly aimed at China. So for China, whoever comes to power will impose sanctions on it More or less the same On the contrary, Europe and Japan, are starting to get nervous Especially Europe On trade, you increase tariff and then want to withdraw from Paris Agreement You really don’t take Europe seriously Many mainstream media in Europe even claimed that In 2024 the biggest crisis for Europe is US election Actually, this subtly hints at where the real risks are coming from Harris, Biden are all part of the family so the bigger risk is no other than Trump Lagarde, the president of the European Central Bank, expressed even more directly
9:10 She said that if Trump is elected, he will be a threat to Europe. OK, then what will be the results of Trump's radical trade protection policy? It's difficult to predict for the long term He will definitely received counterattack from other countries How will EU react? How will China react? The sanctions will become more severe or will they gradually ease after negotiations? This. isnot what I should be analysing Policies affect economy The point is how to follow the step of policies Look at the financial calendar in Futu Moomoo, you can grasp the policy data and market trends of the general election, interest rate cuts, etc. Recently, moomoo has been upgraded as a one-stop investment platform that understands Chinese people best. With just one account, you can handle US stocks, Singapore stocks, Canadian stocks, Australian stocks, Malaysian stocks, Japanese stocks, A-shares mutual funds, bonds, options futures, and forex More and more for you to opt
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10:43 Let's get back to Trump’s more aggressive trade policy. We mentioned that although it still has a lot of uncertainty in the long term but what is the one thing that is certain? The uncertainty will be even higher for Trump You can imagine that if Trump is elected president of the United States again, I think leaders, investors, and media people from all over the world may be more wary. Whether it's checking the news, browsing emails or even scrolling through Twitter, you'd have to do it more frequently Just when you're about to clear the table and get off work What did Trump say again? Just when you are having dinner What policies did Trump come up with? It’s very exhilarating. Anyway, some people like it and some don't, but in short, the uncertainty will increase. When we talked about The Fed previously its core is to fully communicate and seek stability? Powell strives to be a "boring old man", Meanwhile Trump side is completely on the other extreme.
11:28 He wants to be a "crazy old man" and stir up the global market and global economy. He will lead to more uncertainty in the entire market and will also lead everyone to hedging in advance Then Trump's radical tariff policy will indeed increase the U.S. government's tariff revenue in the short term This is actually a very important propaganda point for Trump For the US citizens I will give you tax cuts. Where do the taxes come from? We collect them for the foreigners Let's tigether Make America Great Again. For those of you who have studied economics should all know that this tariff is indeed collected from foreigners, but no matter which link is collected in the middle, it may be the end consumers who had to bear the bulk of the tax cost . How do you put it? If you suddenly raise tariffs so radically, it will greatly increase the price of imported goods
12:14 What will this cause? All people holding US dollars will bear the cost of this tariff . Goldman Sachs estimates that every 10% increase in effective tariffs the core inflation rate in US will increase by one percentage point. Although we don’t know how they estimated it but the correlation between the two is still quite strong. Let’s chat for a bit Watching Trump’s speech is really interesting. Everything is stated so absolutely As soon as I take office, the economy will get better, inflation will come down, Everybody will be very rich. Then when talked about Democrat or Harris or Biden He really just went at them said Harris can't solve problems because Harris is the problem. Harris, you are the worst vice president in the history of the United States. It’s like listening to a talk show. You may feel that we talk more about Trump today. Indeed, his policies definitely have a unique flair so we can talk more about it Harris' side is relatively more stable
12:59 If you say too much, you may get sleepy.If I say too much you might get sleepy It's all for the sake of entertainment Let's continue and take a look at the immigration policy. We all know that the United States is a country of immigrants. The current situation is that there are a large number of illegal immigrants. It is estimated that there are more than 11 million illegal immigrants About two-thirds of them are from Latin America How to treat these illegal immigrants? The difference between the two parties is still relatively large on this issue. The Democrat generally has a relatively open attitude towards illegal immigrants especially during Biden's term The number of illegal immigrants in the US has surged In 2023 alone, there are more than 2 million illegal immigrants flow into the United States. However, the Democrat later realised that that it could not let people in like this and began to tighten restrictions on illegal immigrants. However, generally speaking, the Democrat's attitude is relatively relaxed, while Trump's attitude is very obvious. Whether it is wording or policies, it can be said to be very extreme. Before the election, he said that these people are very dangerous
13:45 we want "Build A Wall". You must have seen this on social media a lot This time it's the same has no intention of letting go We want to "Build a longer wall". He even said that all these illegal immigrants should be kicked out. They aim to drive 15 to 20 million people out of the US Of course, this number is actually a bit unrealistic, but his attitude is very fierce and obvious. So what difference will this make? It is definitely difficult to say in the long term. Let's look at the short term. If there are fewer illegal immigrants first of all, as he advertises, more Americans will get jobs. But because the overall employed population is smaller so the direct result is that the U.S. GDP will decline However, the market believes that this is not the biggest impact Although illegal immigrants are relatively large in number their contribution to GDP is relatively limited. But what do they contribute a lot to? Prices. You see, we are talking about inflation again. The illegal immigrants
14:32 has relatively low income It will drive down the price of goods If we drive them all away, the labour cost of the US will soar. The most direct impact is actually on prices. So from the perspective of immigration policy, Trump will still stimulate inflation. After analysis did you realise that every Trump's policies will heat up prices . Do you think inflation is the only result of that? No No No. Think about it, once Trump comes to power and launches tariff policy, what the market is most worried about is actually inflation in the US We talked about inflation before. Do you remember it? There is a principle called 'what you fear most is what comes true' Expected inflation will lead to inflation. The more you fear ghosts, they will appear everywhere so the market will expect that the Fed will raise interest rates to deal with inflation. And the Fed's interest rate hikes are actually bearish for both global stock and bond market. So if you look at this chain, Introducing tariff
15:17 expected increase in inflation expected Fed interest hike Market bearish sentiment. We mentioned that Trump's tax cut will be good for capital market So you see, when one political party comes to power its impact on the market may sometimes be at odds with each other. It’s hard to say which one is more obvious. It may also depend on the order in which the policy is implemented The next big part is regulation Sounds a bit boring right? I guess everyone may not care about it because it is indeed very important and the consequences are serious So let’s go through it quickly. To put it simply, Trump and the Republican Party tend to deregulate on financial regulations on energy regulations. Especially on traditional energy On Democrat side It tends to be tightened. They constrained Wall Street so tightly The Dodd Frank Bill was introduced by the Democrat Moreover, the Democratic Party is also very fond of antitrust investigations of large companies
16:03 So from a regulatory perspective If Trump comes to power, it will be good for the financial industry traditional energy, and big companies. The Democrat will do the opposite By the way if Trump comes to power, it will be good for traditional energy meanwhile the Democrat is very supportive of new energy Biden recently signed a bill called the 'Inflation Reduction Act.' Although the name is called Inflation Reduction in fact it has little to do with inflation. Its main purpose is to subsidise and stimulate the new energy industry. If Harris comes to power, this kind of stimulus for new energy is likely to continue to increase Trump is the complete opposite New energy and global warming You Europeans are just making a fuss out of a molehill. These are all scams. I want to withdraw from the Paris Climate Agreement. He will be more inclined to support traditional energy, including the traditional automobile industry We have just looked at their policies and possible results from several different directions But there are indeed some
16:48 that are in conflict with each other So let's take a look at these policies as a whole and their impact on the market If Trump takes office compared to Harris taking office his policies may theoretically lead to higher inflation more national debt issuance, hotter capital markets, and more closed global trade relations. A larger wealth gap, relatively fewer jobs, and more capital inflows Good for the stock market, especially for the traditional energy industry and good for the financial industry. Overall, both parties tax policies, trade policies, regulatory policies, immigration policies and etc for some people they might feel that why is it all oer the place and are not related to each other I think there is a fundamental logic that helps distinguish the policies of these two parties
17:34 The Democrat tends to lean towards big government. You see, They advocate collecting taxes from the rich and then advocate the government to provide relief to low-income people. They advocate the government to provide universal health insurance to stimulate employment. They prefer the government to first collect the money and then entrust it to enhance the welfare of the entire society The Republican Party relatively more inclined towards small government a freer economy. You see, they cuts taxes and deregulates It means freer competition in the market. A very typical Republican president was Ronald Reagan When Reagan took office in the 1980s US had just experienced high inflation and the Fed's major interest hike The overall economy was relatively weak Reagan launched his Reaganomics, which mainly focused on four points: tax cuts, reducing regulations control government spending and money supply
18:19 The entire concept is to to build a very free very loose market The government had to step aside At that time, it even led to a wave of financial liberalisation in Europe, Latin America and Japan. You can see their attitudes toward civil servants reflect this— Democrats tend to favour strengthening protections for civil servants and hiring more people Trump, the Republican Party, no why would the government need so many people let go of those that need to be let go During his term, he even signed some executive orders to facilitate the firing of federal workers. In short, the tendency towards bigger or smaller government is quite obvious between the two sides. So I think understanding their policies from this perspective makes it pretty easy to grasp The Democrat's big government is kind of like a strict homeroom teacher. Supervises the students very strictly Just stay safe and steady, and don’t get into trouble The Republican's small government
19:05 is a bit like a hands-off homeroom teacher Just have fun and let your true selves shine If a few little geniuses come out of it, then it’s all good but once it gets too wild and all the kids are starting to fight At this time, a strticter teacher like Democrats will need to take charge. So you see historically, the alternation of these two parties in power has been accompanied by noticeable cyclical patterns in the economy and markets. For example Rupublicans they cut taxes and deregulates, the market will definitely enjoy it the overall market economy tends to show strong performance sometimes even getting a bit overheated. Throughout different historical periods the parties in power have changed according to the needs of the economy and the market I feel that the positions of these two parties resemble two major schools of economic thought Keynesianism and Friedman's monetarism. Keynesianism emphasizes the importance of the government. The economy itself is prone to problems,
19:51 so the government has to stimulate and regulate This resembles who? Isn't this what the Democrat advocates? Monetarism believes that the economy should be free and competitive The government shouldn't involve too much The Fed just need to control the currency and the interest rate Isn't this similar to the Republican's concept of small government I think it is similar but not absolutely If you are interested in this kind of economic theory, we can talk about it in future Of course, there are also some policy directions where both sides are quite aligned No matter who comes to power, they will implement For example, they will continue to issue more national debt to stimulate the economy. It's just that Trump's side may issue more. They will also continue trade protectionism, especially against China, but Trump's side may be more aggressive. For example, they all claim to want to reduce inflation but most of their actual policies are counterproductive Seems like for inflation it may still have to rely on the Fed to raise interest rates.
20:37 There's one that I think is quite funny and a bit inexplicable. and they are both in alignment with it all tips are tax-exempt This policy is actually nothing a very small point. There’s no economic theory that suggests not taxing tips will help the economy in any significant way It’s purely political, aimed at winning elections What was going on at that time? Trump aimed to win over some swing states that's the demographic that frequently receives tips so when he announced that tips wouldn't be taxed the crowd cheered Later Harris followed suit also support that tips are not taxed. There was another round of cheers. Just like that, this seemingly random policy became a point of consensus between the two parties So now Trump is saying Harris knows nothing and is just waiting to copy my policies. Well, these are my insights into the economic policies of both parties and some possible results analysis.
21:23 I hope this gives you a general understanding Thank you again to moomoo for supporting this video. Those of you who are interested can refer to the top comment. Bye Let's together Make America Great Again should we use that He is like this Make America Great Again.
