US Election 2012 News, With the recent move by Mitt Romney to choose Paul Ryan as his running mate for the upcoming election

1. Article Source http://www.investmentcontrarians.com/u-s-dollar/how-a-paul-ryan-and-
mitt-romney-win-will-impact-your-investments/520/
If Paul Ryan and Mitt Romney Win, How
It Will Impact Your Investments
With the recent move by Mitt Romney to choose Paul Ryan as his running mate for the
upcoming election, I believe this sends a strong message to the American people and the
rest of the world that the U.S. is finally going back to its roots by getting on the path to
reducing the budget deficit and preventing a financial crisis.
A financial crisis usually stems from a lack of confidence. If the lenders feel that a
borrower can’t pay, they sell their securities and refuse to lend unless the rates are
extremely high. This is how the financial crisis in Europe is unfolding, as the budget
deficit for many nations remains high. They are continuing to spend more money than
they earn. Running a budget deficit for a short period of time might be okay, if a surplus
is eventually generated to reduce the overall debt. This has not occurred for many years
in dozens of nations, including the U.S.
Ryan understands that the real victims are the American people if a budget deficit is
continually generated. This puts the country at greater risk of a financial crisis, as
investors begin to lose credibility in the nation as a whole. The U.S. is fortunate that so
many other nations are also poorly managed, running up a huge budget deficit and
cresting on the edge of a financial crisis.
One of Ryan’s ideas is reducing government spending by 2015 to 20% of gross domestic
product (GDP) and a long-term target of 15% of GDP. Reducing government
expenditures is a needed step in reducing the budget deficit. Such a move will surely be
seen by international investors as a further sign of confidence in the U.S. and the dollar as
the world standard. If you were an institutional investor, would you lend money to
European nations that continue to run a high budget deficit and with no end to the
financial crisis, or to a nation that has put its foot down on runaway government
spending? I think the answer is quite obvious.
An idea, which I think is great, is simplifying the tax code. By eliminating a lot of the
loopholes that the wealthy use and using only two basic tax rates, 10% and 25%, one of
Ryan’s earlier proposals provides a basic foundation for less tax evasion. In addition,
eliminating capital gains taxes results in one thing—more money being used for
investments. It’s a basic law of the universe; the more you tax something, the more you’ll
see people come up with ways to avoid the tax.
Of course, not all of these policies will be enacted. Politics is all about creating a
discussion with the public over what issues are important. I think with the financial crisis

2. erupting in Europe, America needs to get serious about the looming budget deficit
situation.
What does this mean for your investments? Assuming some of these policies are enacted,
we would be dealing with a short-term stock market that might have some headwinds, as
the adjustment process involved in reducing the budget deficit hits the government sector.
But as fears erode of a financial crisis erupting in America, this will increase foreign
investments over the long term.
Having a stable base from which an economy can grow has always been the key for
investors. This also means that the U.S. dollar will gain strength, reducing prices in
commodities like gold. Government sectors would be hit, but the long-term policies that
would create an environment of economic strength would also decrease the budget deficit
and reduce the chances of a financial crisis from hitting America’s shores. This would be
quite bullish over the next decade for America.
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